By Carla Mozee, MarketWatch FTSE 100 falls by the most since October

LONDON (MarketWatch) -- Tesco PLC shares hit their lowest level in 14 years Tuesday, leading losses on the FTSE 100, after the supermarket chain issued its fourth profit warning this year.

Tesco's share-price drop came on the same day of a global selloff in equities that contributed to a 2.1% loss for the FTSE 100 , to 6,529.47. The move marked the FTSE's biggest decline in nearly two months and its lowest close since early November. None of the index's sectors ended with gains.

Tesco shares fell 6.9%, wiping off roughly $1 billion from Tesco's market capitalization. During the session, the shares fell as much as 17% to trade at prices not seen since February 2000, according to FactSet data. The selling was triggered after Tesco cut its full-year profit forecast, citing investments it's making in its business as it battles rivals. Group trading profit will not exceed 1.4 billion pounds ($2.2 billion), said Tesco. The projection compared with analysts' expectations of GBP1.94 billion.

"If there had been hope that the market would be immune to yet another profit warning, this quickly evaporated, as Tesco has provided profit guidance which is nearly 30% shy of an already lowered estimate," said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, in a note.

Tesco's recovery in the U.K. "could take longer" as Chief Executive Dave Lewis needs to simplify the business through U.K. and international asset sales, change payment terms with suppliers, lower the cost of goods and "start on the long road to rebuilding the Tesco brand with shoppers," said Mike Dennis, an analyst covering food and general retail at Cantor Fitzgerald, in a note.

Tesco rivals were also lower following the profit warning, with Wm Morrison Supermarkets PLC down 4.4% and J Sainsbury PLC declining 1.8%. Marks & Spencer Group gave up 1.4%.

The mining group fell as well, with Chinese state media reporting the government might cut its 2015 growth target to as low at 7%, down from the 2014 goal of about 7.5%. China's top leadership is meeting for the annual Central Economic Work Conference in Beijing. Chinese stocks, which have been soaring recently, dropped sharply, leaving the Shanghai Composite down more than 5%, with the downdraft stemming from a new rule from China that tightens the use of corporate bonds as collateral for short-term financing.

Mining-sector heavyweight BHP Billiton PLC (BHP) lost 1.6% and Rio Tinto PLC (RIO) fell 1.2%. Among energy issues, oil-services company Petrofac Ltd. ended down 3.6% and oil major BP PLC was off 3% . Oil prices (CLF5) remained under pressure, trading at five-year lows.

"Unless investors close [U.S. dollar] positions in the run-up to Christmas, or the [People's Bank of China] add further stimulus to its economy in the coming weeks, it appears unlikely the oil markets will enter a correction period anytime soon," said Jameel Ahmad, chief market analyst at FXTM, in a note Tuesday.

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