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Slowing supermarket growth sends stocks tumbling

Supermarket stocks took a hammering today after new industry figures showed the grocery market grew at its slowest rate for 11 years.

The latest data from Kantar Worldpanel showed that Tesco, Sainsbury's and Morrisons all lost market share over the last 12 weeks as competition from the discounters Aldi and Lidl intensified.

All three companies were lower in the FTSE 100 Index, which drifted 26.9 points lower to 6771.9 after renewed jitters over the valuation of technology companies caused an overnight fall in the value of Wall Street markets.

Market heavyweight HSBC contributed to the Footsie's decline after it reported a decline in first quarter profits due to weaker earnings in Asia and from its investment banking division.

HSBC was 8.2p lower at 595.9p, while Barclays fell 3.9p to 241.1p and Lloyds Banking Group dropped 1p to 77.4p in a tough week for banking sector.

Credit checking firm Experian was the biggest faller in the top flight after forecasting subdued trading in the first half of the financial year due to headwinds such as the World Cup on business in Brazil. Shares fell 69.5p to 1064.5p.

It was joined on the fallers board by Morrisons as the Bradford-based chain received a blow on the eve of its latest trading update when Barclays lowered its rating on the stock and cut its price target to 180p.

Morrisons fell 6% or 12.3p to 189.7p and was joined on the fallers board by Sainsbury's after the rival chain surrendered an initial rise seen in the wake of annual profits at the top end of City expectations.

The group's outgoing chief executive Justin King announced a ninth year in a row of growth, with the 5.3% rise in underlying profits to £798 million drawing praise from City analysts for the strength of the retailer's operating margin.

Shares were up by nearly 2% at one stage but later stood 9p lower at 324.4p following the Kantar figures and expectations that the group will post a loss in the current financial year.

Tesco shares were 2.4p lower at 285.4p.

Elsewhere, shares in ITV surged 2.25p to 188.15p after it unveiled a deal to acquire a controlling stake in Leftfield Entertainment, which produces more than 300 hours of programming a year for over 30 US networks.

The deal for the maker of Pawn Stars and Real Housewives of New Jersey means ITV's US studios division will become the country's largest independent unscripted producer.

Shares in low-cost airline easyJet were 40p higher at 1707p after it said it carried more than 5.78 million passengers last month - a 10.2% increase on the total for April last year.

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