* FTSE 100 up 0.3 pct
* M&S boosted by food sales growth
* Bucks falls for WM Morrison and Tesco
* William Hill hit by threat of government regulation
By Francesco Canepa
LONDON, Jan 9 Marks & Spencer helped
Britain's FTSE 100 trade with small gains on Thursday as
a positive performance at its foods business lifted the stock,
bucking a string of gloomy Christmas updates in the retail
Shares in M&S rose 2.5 percent after the upmarket retailer
reported organic growth in food sales in the Christmas quarter,
offsetting a weak show for its clothes business, which reported
a 10th consecutive quarter of falling sales.
The stock, which is still down 12 percent from a five-year
high hit in September, outperformed steep share price falls at
larger food retailers WM Morrison and Tesco,
which reported like-for-like quarterly sales drops on Thursday.
"The trend in the food market is being very much towards the
top-end and value-end outperforming the big four, and certainly
the results over Christmas have confirmed that trend is
continuing," said Investec analyst Kate Calvert, upgrading M&S
to "buy" from "hold".
"With Marks & Spencer, there is a lot of bad news already in
the share price and given that there are fundamental changes
going on in the business model, which we will start to see over
the next couple of years, I don't think that's factored into the
M&S was among top gainers on the FTSE 100, which was up
22.48 points, or 0.3 percent, to 6,744.26 points at 1051 GMT.
The energy sector also provided support for the index as the
oil price firmed, with Tullow Oil among top gainers
after an upgrade by HSBC.
Rivalling the retailers among top fallers was William Hill
, down 7 percent. It was downgraded to equal weight from
overweight by Barclays after Britain's parliament debated fixed
odds betting terminals and did not rule out restricting them.
"Regulatory change has always been the key driver of
sentiment toward the gambling sector. Yesterday the Labour Party
called for greater regulation of the gambling industry in the
UK," analysts at Barclays said in a note.
"We stress that there has been no change to regulation but
we expect that this negative news-flow will weigh on the sector
... In the absence of clarity, we downgrade William Hill."
Mid-cap Ladbrokes fell 4.7 percent, with Barclays
cutting its rating on the stock to "underweight".
"For the bookmakers, any mention of regulation is going to
be a big concern for investors, and as the market is weaker
today, the move is getting exaggerated," Will Hedden, sales
trader at IG, said.