The battering Tesco shares have taken as spooked investors ditched them can be taken as a clear warning that 2012 has the potential for a nasty stock market crash.
Tesco delivered a trading update that was poor in terms of UK sales. The supermarket giant is struggling in its own backyard, as consumers cut back and analysts have been sniping at its sliding like-for-like UK sales.
Despite those local troubles, Tesco has been consistently growing profits at a robust rate and that has kept its share price bobbing along. What did for it this morning was a hint of caution on that.
It said: ‘We expect Group trading profit growth to be around the low end of the current consensus range.’ And thus the shares of one of our most successful companies, that many were arguing was already undervalued, plunged 15 per cent.
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