UPDATE 1-London's FTSE 100 muted as energy gains offset broader declines; B&M tumbles after profit warning

* FTSE 100 up 0.05%, FTSE 250 down 0.44% * B&M falls after annual profit-drop warning * Imperial Brands higher after share buyback plans * Shell advances after upbeat Q3 LNG forecast (Updates after market close) Oct 7 (Reuters) – London's FTSE 100 closed nearly flat on Tuesday as investors paused after last week's rally, with overall market declines being offset by gains in major energy stocks. The blue-chip index closed up 0.05%, while the mid-cap FTSE 250 slipped 0.44%. An index of retailers fell 1.1%. B&M slumped 7.8%, the biggest drop on the FTSE 250, after the discount retailer warned of a drop in its annual profit amid weak sales. Meanwhile, the latest study from Halifax showed the rise in British housing prices was slower than expected at 1.3% in 12 months, and the weakest since April 2024. Homebuilders, including Vistry and Bellway, declined 3% and 1.1% respectively, bringing down the household goods and construction sector by 1%. On the flip side, energy stocks rose about 1%. Oil major Shell gained 1.5% after lifting its third-quarter LNG production forecast. The FTSE 100 had rallied to record highs last week on a boost from beaten-down healthcare stocks that saw some investor interest after the U.S. government inked a deal with drug giant Pfizer, reducing uncertainty hanging over the sector. The benchmark also hit an intraday record high on Monday but retreated after the French prime minister's resignation brought fiscal and political stability concerns to the forefront. Analysts expect markets to be in a wait-and-watch mode in the absence of major catalysts and the ongoing U.S. government shutdown. Among other stocks, Imperial Brands gained 3.4% after the Winston cigarette maker announced an additional share buyback of 1.45 billion pounds ($1.95 billion). Rentokil advanced 3.9% to top the FTSE 100 after Bernstein double-upgraded its rating on the pest control company to "outperform" from "underperform". Luxury fashion house Burberry rose 3% tracking gains in European luxury players. (Reporting by Avinash P, Purvi Agarwal and Sanchayaita Roy in Bengaluru; editing by Vijay Kishore and Mark Heinrich)

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