Reading were unable to stop Leicester City going top of the Championship on Boxing Day.
The Foxes beat the visiting Royals 1-0, thanks to a David Nugent penalty after 21 minutes.
The home side were awarded the spot kick, after Anthony Knockaert was fouled by Shaun Cummings.
Reading's best chance came in the second half, when Alex Pearce's header was cleared off the line by Ritchie De Laet.
Royals boss Nigel Adkins said: "We were poor in the first half, but after the break we were the better team."
Reading's tough festive period continues on Sunday, with a trip to Middlesbrough (kick-off 3pm).
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