BERKELEY Group endured a bruising session on Friday after the top-tier housebuilder spooked investors by failing to ramp up production.
The FTSE 100 Index closed up 24.38 points at 7,164.14, but Berkeley was left licking its wounds as the market took a dim view of its decision not to churn out homes at a faster rate.
The group said high transaction costs, the 4.5 times income multiple limit on mortgage borrowing and "prevailing economic uncertainty" were factors that meant it was "unable to increase production beyond the business plan levels".
Shares in Berkeley tumbled five per cent, or 210p, to 3,713p, sending rivals Barratt Developments and Taylor Wimpey down 9.2p to 527.2p and 2.6p to 184.2p respectively.
David Madden, market analyst at CMC Markets, said: "Traders received an insight into the psyche of Berkeley Group today after the company hit out at planning permission policies and buy-to-let lending practices.
"The homebuilder maintained their positive forecasts and stated that its position is 'resilient', but the commentary about the backdrop indicates some nerves.
"The company is focused on London and south-east England, and house prices are a touch softer now, which is also weighing on the stock."
Across Europe, Germany's Dax pushed 0.4% higher and the Cac 40 in France was 0.3% ahead.
On the currency markets, a rally from the US dollar dragged on sterling, with the pound slipping marginally to $1.393.
Against the euro, the UK currency remained in positive territory, lifting 0.1% to €1.13.
Brent crude stepped up 1.6% to $66.06 a barrel as traders responded to a report from the International Energy Agency (IEA) predicting demand for oil will climb by 1.5 million barrels.
Elsewhere in UK stocks, JD Wetherspoon was left nursing a 6% shares fall after it said rising costs would hamper sales over the next six months.
The group posted a 36.1% rise in pre-tax profit to £54.3 million in the 26 weeks to January 28, with revenue rising 3.6% to £830.4 million.
Like-for-like sales rose 6.1% in the period, but chairman Tim Martin said that growth in comparable sales will be lower in the next six months as it stomachs an array of costs. Shares were down 81p to 1,214p.
A takeover approach from US suitor CME sent Nex Group's stock price rocketing more than 30%, putting former Conservative Party treasurer Michael Spencer in line for a bumper payout.
The electronic trading firm was up 203.5p to 874p after derivatives trader CME mounted a preliminary approach.
The FTSE 250 firm has a market capitalisation north of £3 billion, with Mr Spencer holding a 17% stake in the company.
Meanwhile, outsourcer Mitie was suffering a tough session despite affirming that its turnaround plan was on track and will churn out higher cost savings than previously thought.
The group, which has been under pressure following a string of profit warnings, said that its transformation plan will now see it trim costs by £50 million a year by 2020.
It marks a 10% increase in cost savings as Mitie moves ahead with simplifying its corporate structure, outsourcing and automating some back office functions, merging its London offices into one and also overhauling its group-wide IT.
Shares sank 3% lower, off 4.9p at 156.3p.
The biggest risers on the FTSE 100 Index were easyJet up 33.5p to 1,658.5p, BP up 9.2p to 473.8p, Glencore up 6.4p to 385.5p, Pearson up 11.6p to 775.8p.
The biggest fallers were Berkeley Group down 210p to 3,713p, Evraz down 17.6p to 420.9p, Kingfisher down 6.9p to 343.4p, Tesco down 4.2p to 209.8p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here