Fallers outnumbered risers by three-to-one among Footsie constituents as the top-share index took a tumble.
The FTSE 100 fell 35 points to 7.028, with struggling supermarket giant the hardest hit – down 5.2% at 222.65p.
The supermarket giant announced the biggest loss in its history, a whopping £6.4bn, after a string on write-offs that were significantly worse than the city expected.
Chief executive Dave Lewis said the results "reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years."
Sector peers Morrisons (LON:MRW), down 4.1%, and J. Sainsbury (LON:SBRY), down 3.7%, swallowed some of the same medicine Tesco was forced to take.
Funds supermarket Hargreaves Lansdown (LON:HL) was off 2.9% at 1,198p after a downgrade from broker Jefferies to ‘hold’ from ‘buy’.
Another top-liner taking a tumble was construction equipment hirer Ashtead Group (LON:AHT), which slipped back 2.1% to 1,139p after US rival United Rentals cut its 2015 earnings forecast.
On the plus side, aerospace engine maker Rolls Royce (LON:RR) was the biggest gainer on the appointment of former ARM (LON:ARM) chief executive Warren East to succeed John Rishton. Shares jumped almost 4.1% to 1,048p.
Builders merchant Travis Perkins (LON:TPK) was also higher, rising 2.7% to 2,074p after it released better than expected first quarter results with like-for-like sales rising 5%.
Miners generally had a good day, with BHP Billiton (LON:BLT) up 20p to 1,483p after its third quarter operational update.
Group production increased by 9% for the nine months ended March 2015 with records achieved for 10 operations and five commodities.
In small caps news, Deltex Medical (LON:DEMG) signed a ninth hospital in the US for its blood flow monitoring systems. Shares were 18% higher to 5.75p.
Mariana Resources (LON:MARL), up 12% at 3.03p, has started its eagerly awaited phase two drilling programme at the Hot Maden gold-copper project in Turkey.
On the downside, Eurasia Mining (LON:EUA) tumbled 0.18p to 0.60p as it completed a £515,700 fund-raising by placing shares at 0.55p a pop.
ValiRx (LON:VAL), down 13.3% at 0.20p, unveiled plans for a reorganisation of its share capital to reduce the number of shares to be more in line with AIM peers.