Stock Market Panic!

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AS panic gripped investors on the world’s stock markets, it emerged yesterday that Warren Buffett’s Berkshire Hathaway investment company has sold more than 245 million shares in supermarket giant Tesco.

The sale takes Berkshire’s holding to below 3%. Earlier this month, Buffett said his decision to invest in Tesco had been a ‘huge mistake’.

Berkshire Hathaway owned 3.7% of Tesco at the end of 2013, a stake worth about £1bn.

The supermarket giant’s share price has plunged more than 50% over the last 52 weeks after falling sales and accounts mis-reporting have unsettled investors.

Buffett’s dumping of Tesco shares follows that of another major investor, Blackrock, which began selling down its 5% Tesco stake in September.

Meanwhile, hopes for a rebound on the FTSE 100 yesterday after Wednesday’s shares rout faded, after an initial rally petered out.

The London blue chip index saw its heaviest one-day fall in 16 months on Wednesday, closing down 2.8% or 181 points to 6,211.64.

That wiped £46bn off shares, marking its lowest point since July last year.

Yesterday, the FTSE 100 fell 0.6% below Wednesday’s close to 6174.41 after the official eurozone inflation figure for September was left unrevised at 0.3%.

Shares also collapsed across Europe as the Eurostat agency said there are now five countries with annual deflation – Greece, Italy, Spain, Slovenia and Slovakia.

The FTSE’s continuing slide followed another slump in share prices on Wall Street on Wednesday where the Dow Jones Index closed over 460 points down or 2.8%.

This was followed by sharp falls on Asian markets overnight, amid continuing worries over the global economy.

US retail sales for September fell 0.3% on the previous month and other key data on manufacturing cemented a gloomy picture.

Japan’s blue chip index Nikkei 225 closed down 2.2% at 14,738.38 yesterday, a four-and-a-half-month low.

Hong Kong shares were down 0.5% as the Hang Seng Index fell to 23,013.86.

The Shanghai Composite fell 0.5% after data showed that the rate of inflation in September fell.