“It takes a long time to think the unthinkable,” Tom Gadsby, an analyst with SG Securities, said. “It’s been a safe haven for so long, people love to love it. But even the mighty have to fall some time.”

And they do not come much mightier in British business than Tesco, the retail giant that seems to just get bigger and bigger. There are fears, however, that next Tuesday grim sales figures could herald the supermarket group’s first drop in annual profits for 15 years, a possibility that sent its shares down 6.3p to 295.3p yesterday.

Mr Gadsby believes that next week Sir Terry Leahy, Tesco’s chief executive, will have to disclose that the retail behemoth is grinding to a halt as it cuts prices of an ever larger number of items to compete with Aldi and Lidl, the discount retailers. He believes that sales growth will have slowed from 4 per cent to 1.3 per cent, quarteron-quarter, the worst figures since the early 1990s. In Tesco’s financial year, beginning in February, sales will be flat and profits will slump as deflation takes hold, he said.

Yet RBS analysts offered a different view on Tesco. RBS said that the slide in Tesco’s UK supermarket earnings would be made up for by the acquisition of Tesco Personal Finance and Homever in South Korea.

There were very low volumes on the FTSE 100 yesterday, with American markets open for only half a day after Thanksgiving. It closed up 61.91 points at 4,288.01.

Those who were at their desks took profits on mining stocks after a week of gains and bought into safe-haven transport companies, such as FirstGroup, up 29¾p at 470p, and pharmaceutical shares, another haven.

Lonmin was the worst performer, down by 61p at 852p. Antofagasta fell 30p to 432p. 3i Group, the private equity company, fell 25½p to 411¾p.

In the FTSE 250, Mondi, the paper and cardboard maker, fell 6p to 166p and DS Smith fell 1¼p to 56¾p after the AIM-listed Powerflute, which makes corrugated card in Finland, gave warning of a sudden drop in demand from packaging customers. Its shares fell 6½p to 18p. Debenhams, the department store group, fell 1½p to 24¼p amid fears that it will have to repeat its three-day “spectacular” discounts. John Lewis is cutting prices heavily, as is House of Fraser. ”

Investec fell 23¼p to 266¼p after Morgan Stanley began coverage with a 200p target, saying that the South African-based brokerage, which owns the sub-prime lender Kensington, would have to refinance £2.6 billion of debt over the next 12 months.

Dairy Crest fell 1¼p to 198¾p as JPMorgan said that the falling price of cheese meant that it may need a capital injection of between £120 million and £180 million, nearly three quarters of its stock market value, to avoid breaching covenants.

Taylor Wimpey rose 1p to 11p, continuing a rise from 4p that began on Tuesday after a top-five investor removed an overhang by selling out the last part of a stake held through a Morgan Stanley account. KBC Peel Hunt believes that the price is so low that a debt-for-equity swap may provide value for existing holders.

New York: Financial shares rose amid signs that US liquidity measures were beginning to work. The Dow Jones industrial average closed up by 97.73 points at 8,824.34.

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