Asda is on the warpath as it seeks to gain customers - but are the markets overreacting?

It normally takes something big to knock 13% off Tesco's share price - a profits warning, say, or a 2014-vintage accounting scandal.

- Nils Pratley

It normally takes something big to knock 13% off Tesco's share price - a profits warning, say, or a 2014-vintage accounting scandal. This is the UK's largest supermarket chain by a distance, and a business that runs on rails now that it has sold most of its foreign adventures to concentrate on the day job.

Yet 13% is the fall in Tesco shares since last Friday when Asda said, in effect, it has had enough of being the industry's punchbag and will try to regain lost market share by cutting prices. Sainsbury's shares are also off 8% in the same short period, and even Marks & Spencer, down 6%, has been caught by investors' worries about a price war.

Before shoppers mentally chalk up the savings in their grocery baskets, however, it's worth asking if the stock market could be overreacting.