By Atul Prakash and Kit Rees
LONDON (Reuters) - Britain's top equity index ended slightly lower on Monday after hitting a two-week high earlier in the session, with a fall in energy and housebuilding stocks outpacing a rally in shares of precious metals miners.
The blue-chip FTSE 100 index (FTSE) closed 0.2 percent lower at 7,172.15 points after setting an intra-day peak of 7,208.73, the highest level since January 20.
Housebuilders Taylor Wimpey (L:TW), Barratt Developments (L:BDEV) and Persimmon (L:PSN) were down 1.6 to 1.7 percent before the launch of the government's latest attempt to fix a chronic shortage of new homes..
Housing minister Gavin Barwell said on Sunday the property market was too dependent on large homebuilders. On Tuesday, the UK government will publish details of a new strategy, billed as a major shake-up of the planning and construction system.
"There are concerns that a rise in housing supply following the government's likely move could hit margins of housebuilders and force them to slow down the pace of new construction to maintain a stable supply," said Jawaid Afsar, senior trader at Securequity.
The market was also hit by a 0.5 percent fall in the UK oil and gas index (FTNMX0530) after crude prices slipped further as a stronger dollar and ample U.S. supplies outweighed OPEC output curbs and rising tensions between the United States and Iran.
Shares in Ryanair (L:RYA) fell 0.6 percent after the budget airline said average fares fell more than expected in the last three months of 2016 amid a capacity glut in Europe's short-haul market.
British Airways-owner IAG (L:ICAG) fell 2.1 percent.
Gold miners provided some support to the market.
Randgold Resources (L:RRS) jumped 4.2 percent, the top gainer in the FTSE 100 index, on stronger gold prices and after the reporting a 76 percent surge in its fourth-quarter profits. It said it would increase its annual dividend by 52 percent.
"This is an impressive set of figures," Fiona Cincotta, market analyst at City Index, said in a note.
"Given the heightened uncertainty in the geopolitical arena, with Trump at the helm, gold could be looking to achieve $1,300 should the safe-haven trade start to replace the Trump trade, which would serve to boost the miner further."
Fellow precious metals miner Fresnillo (L:FRES) gained 1.3 percent after gold climbed to its highest in nearly three months as worries about the political landscape in the United States and Europe reinforced investor interest.