UK's FTSE 100 ends flat as energy, retailers weakness counters defence gains

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Both FTSE 100 and FTSE 250 end flat

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Defence stocks up after Trump calls for higher military budget

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Associated British foods (ASBFF) slides after cutting FY profit forecast

(Updates to markets close)

Jan 8 (Reuters) - London's FTSE 100 was little changed on Thursday as weakness in oil and retailers was offset by rising defence ?and financials stocks, with the rally in British equities taking a breather after hitting a record high earlier this week.

The ?blue-chip FTSE 100 held steady at 10,044.7 points, while the domestically focused mid-cap ?index was also flat, holding near its four-year peak.

Energy giant Shell ?fell 3.5% after ?the company said it expects a loss in its chemicals and products business in the fourth quarter, prompting questions ?over whether it will maintain the pace of ?its share buyback programme. Rival BP was down 0.6%.

At the bottom of the FTSE 100 was Associated British foods (ASBFF) , which slumped 14% after ?it warned annual profit would fall as ?heavy discounting ?at its Primark fashion business and weaker U.S. demand hit food ingredient sales.

Greggs (GGGSF) fell 5.8% after the fast food chain warned subdued consumer confidence meant profit ?would be flat this year, despite a pick-up in sales in the Christmas quarter.

Food retailer Tesco (TSCDF) forecast full-year profit at the upper end of its guidance as it reported a 3.2% rise in underlying UK sales for the key Christmas trading period. Its shares however, fell 6.7%.

DEFENCE STOCKS AT PEAK AS US MAY HIKE MILITARY SPENDING

Helping ?offset some ?losses, defence stocks, rose to a record high, joining a rally in European and U.S. peers after President Donald Trump called for higher U.S. defence spending.

Britain's ?largest defence company BAE systems gained 5%, hitting its highest since October. U.S. strikes on Venezuela have intensified geopolitical concerns, lifting defence shares earlier this week.

Heavyweight banks climbed 0.8%, offsetting some weakness.

UK stocks started the year on a strong note. The blue-chip FTSE topped 10,000 points for the first time last week as investors also priced in Bank of England rate cuts later this year.

The ?focus now is on a U.S. December jobs report due on Friday, which could offer more clues about the Federal Reserve's interest rate path.

Meanwhile, data on Thursday showed British house prices rose by a slower-than-expected 0.3% ?in the 12 months to December. (Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Bernadette Baum)