Price war prospect sees supermarkets fall Rumblings of a supermarket price war meant Tesco and Wm Morrison were among the sharpest fallers yesterday. The grocers slipped after number-two player Asda said it would cut prices by £1bn over the next five years. Asda said the investment would widen its advantage over peers as well as narrowing the gap on discounters. "Announcements of price investments are common in the sector, particularly in the UK, and can be part of the PR efforts of the company," said JPMorgan Cazenove. However, this . . . could well be the inflection point we are expecting in the competitive environment and industry gross margins. Asda is already about 6 per cent cheaper on average than its three main rivals, according to Jefferies analysis. However, Asda was the least aggressive with promotions and did not offer loyalty card rebates, suggesting that what it gave with one hand it took back with the other, the broker added. Shore Capital dismissed Asda's move as "more of the same." "The market knows that Asda has strong price credentials and yet the group is not winning market share," Shore said, adding: "wars are rarely announced five years in advance." Tesco ended 2.3 per cent lower at 356.2p and Morrison lost 2.8 per cent to 266.2p. J Sainsbury, which had peaked at 428p as Wednesday's results led brokers including Citigroup and Natixis to upgrade, shed the gain to close up just 1 per cent at 414.6p. A bouyant wider market lifted the FTSE 100 by 36.13 points or 0.5 per cent to 6,666.13. UBS "buy" advice helped WPP, up 2.7 per cent to £13.42, while Shire rose 2.9 per cent to £28.40 after chief executive Flemming Ornskov paid £600,000 to take a maiden stake in the drug developer. Ladbrokes dropped 3.5 per cent to 180.2p after Goodbody Stockbrokers sent an email to clients arguing that a poor run of sports results had made full-year expectations a stretch. Late in the day Ladbrokes released a statement saying that while it was trading within the range of forecasts, speculating on the rest of the year was "extremely premature." Ophir Energy took on 10 per cent to 362.1p after the long-awaited sale of a stake in its Tanzania gas fields solved funding concerns. Temasek's Pavillion Energy bought a 20 per cent interest in the blocks in a deal expected to net Ophir about $1bn after tax. Xaar hit a record high, up 7.4 per cent to £10.15. Interest in the printer maker has been revived by recent news from Rolls-Royce and GE that they were looking at 3D-printing parts for jet engines. Serco slid 16.8 per cent to 419.1p after delivering an even more severe profit warning than had been predicted by the weekend press. Charges to cover the cost of restructuring and business reviews added to contract delays, exclusion from new UK government work and a tough US market, to cut 2014 earnings expectations by about 13 per cent. Perform dropped 14.8 per cent to 460p, with the internet broadcaster warning of a £4m earnings shortfall after orders to its technology and production business had not materialised. Sector peer Blinkx added 9.7 per cent to 230p on "buy" advice from Goldman Sachs. It forecast the video advertising specialist to deliver 39 per cent compound annual earnings growth by 2018, justifying a standalone share price of 318p that would rise to 341p if a bidder emerges.