NatWest has trimmed its forecast for the year ending this month to pounds 678m but it is the much more savage reductions it has made for the next two years which have intrigued the stock market.
Next year's profit estimate has been slashed by pounds 37m to pounds 726m and the following year's by pounds 69m to pounds 774m.
NatWest's more cautious approach to the supermarket business left some of Tesco's rivals lower with Argyll, the Safeway chain, off 5.5p to 328p.
The rest of the market failed to build on its recent strength, despite the well-signalled transatlantic interest rate cut. The FT-SE 100 index shaded 6.5 points to 3,752.8 although supporting shares continued to edge ahead in brisk trading.
Trade Indemnity was among the best movers with a 24p gain to 97p following the agreed pounds 177m cash bid. Misys, the computer group, managed a 62p gain to 637p following results.
Hanson continued to reflect the market's surprising disenchantment with its four-way split. Once again the shares retreated in busy trading with the price off 9p to 193.75p.
But Rolls-Royce climbed 4.5p to 208.5p on the Henderson Crosthwaite target of 240p and Cable & Wireless, up 7.5p to 452p, was supported by a Merrill Lynch recommendation.
Takeover hopes again glowed at Yorkshire Electricity with indications a US strike was near. The shares gained 17p to 736p. It is suspected underwriting for the offer is well advanced. A strike is expected early next week.
And Perpetual, the fund manager, scornfully shrugged aside talk that bid speculation was "complete nonsense", jumping another 50p to a new peak of 2,183p.
Christie International held at 208p as Peter Blythe, the auctioneer's deputy finance director, said he was at a loss to explain the share build- up of Bahamas-based Joseph Lewis who has 28.73 per cent through his Abel vehicle.
Mr Lewis, who started buying two years ago, has said he is a long-term investor. But his continuing bidding for the auctioneers shares has provoked thoughts he may have more ambitious plans.
Reed International, off 24p to 1,012p, was allegedly hit by negative comments from ABN Amro Hoare Govettt. But the securities house denied it had adopted a cautious approach.
Wilshaw, the engineer which has been in ragged retreat since peaking at 80p in September, bounced 5p to 45p as the company declared it could "see no justification" for the share slump.
Last year Wilshaw produced pounds 5.1m; around pounds 6.5m is expected for the current year. Reports that Elektrowatt, the Swiss electricity generator, had put its stakes in Eurodis Electron and Unitech up for sale produced little excitement. Eurodis, where the Swiss group is sitting on 42 per cent, gained 11p to 303p. Unitech, with a 29.25 per cent Swiss involvement, held at 480p.
Dean Corporation, the little AIM-traded property services group, rose 2p to a 13p peak on its expansion hopes and Middlesex, the metals group, held at 8.25p on talk Sir David Alliance, already deeply involved, was planning to sharply increase his interest.
Ashbourne, the nursing homes chain, rose 7p to 141p as Sun Healthcare, the US group, lifted its interest to 23.9 per cent, by buying 2.1 million shares.
The bio-babes had a wounding session as Celltech slumped 163p to 518p as its asthma drug was withdrawn after the latest trials. However, British Biotech displayed remarkable resilience; after crashing 270p the shares closed at 2,113p, a mere 10p decline.
Others were not so fortunate. Cortecs International dived 22p to 222p and Cantab Pharmaceuticals lost 35p to 470p. Stanford Rook plunged 40p to 433p.
But ML Laboratories firmed to 454p. There is talk of an investment presentation next week.
ERF, the lorry maker, reversed 60p to 182p on its profit warning. Vibroplant was another profit warning casualty, off 11p at 86p. Boardroom departures lowered Regent Corporation, a struggling housebuilder, 0.5p to 4p.
Farnell, the electrical distributor, encountering City opposition to its US takeover, gained 21p to 667p as supporters stocked up.
r Memory Corporation, with a system for revitalising defective computer chips, jumped 27p to 450p as UBS put its undoubted weight behind the blue-sky AIM-traded group.
Analyst Ross Jobber said his target price was pounds 10 a share by early 1998. They have fallen from a 553p peak in September. Mr Jobber said Memory was moving into profitability and was set to make powerful returns after its initial development losses. A US share quote is likely later this year.
r Bardon, the aggregates group, rose another 2p to 40.5p in another session of heavy trading. The shares have risen from 23p in November. Camas, the roadstone group once part of English China Clays, has emerged as the likely bidder. Its share held at 83p.Reuse content