MARKET REPORT

BERKELEY Group endured a bruising session yesterday 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 build 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 5%, 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.

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 dollars. Against the euro, the UK currency remained in positive territory, lifting 0.1% to 1.13 euro.

Brent crude stepped up 1.6% to 66.06 dollars 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 hit with a 6% shares fall after it said rising costs would hamper sales over the next six months.

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, and 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, and Tesco down 4.2p to 209.8p.