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* FTSE 100 flat
* Next shares tank after profit warning
* Housebuilders find support from note
By Kit Rees
LONDON, Jan 4 (Reuters) - Britain's top share index tradedflat on Wednesday, edging down from a record high hit in theprevious session as shares in Next slumped after theretailer issued a profit warning.
The blue chip FTSE 100 index was flat in percentageterms at 7,175.72 points by 0945 GMT, having hit an all-timehigh of 7,205.45 points on Tuesday.
Next tumbled 9.5 percent to hit a two-month lowafter the retailer cut profit guidance for its current financialyear and warned on the outlook for the next, highlighting"exceptional" levels of uncertainty in the sector.
In its Christmas trading update, Next said its centralguidance for its year to Jan. 2017 was for pretax profit of 792million pounds ($971 million), down from the 805 million poundsit had previously forecast.
"Next has been a market darling for a long time thanks toits highly rated management team and consistent delivery of highoperating margins and surplus cash, whatever the macroenvironment," analysts at Jefferies said in a note.
"Yet with earnings now confirmed to fall for a second year,it does feel as though this time Next has few levers left topull."
Shares in peers Marks & Spencer and Primark-ownerAssociated British Foods also tumbled 5 percent and 3.6percent respectively. Mid cap Debenhams was down 4.9percent.
There was a silver lining for the British retail sector,however, as mid cap B&M jumped 6.6 percent followingits quarterly update.
The British discount store chain said that a recordChristmas drove a strong third quarter, helping UK like-for-likesales rise 7.2 percent.
"Given a lot of investor sentiment has focused on theweaker-than-expected LFL, this should provide some relief overthe sustainability of the sales growth," analysts at UBS said ina note.
British housebuilders were also stronger on Wednesday, withBarratt Developments, Taylor Wimpey andPersimmon rising between 1.4 percent to 2.5 percent,helped by a positive note on the sector from Deutsche Bank.
Deutsche Bank said that they saw close to 30 percent upsideacross the housebuilding sector as a whole. Housebuilders lost more than 20 percent in 2016.
"After a tumultuous 2016, we see appealing value in the UKHousebuilder sector. While investor appetite for UK focusedstocks remains more moderated reflecting Brexit risk, we seedividend yield as difficult to ignore," analysts at DeutscheBank said in a note. (Editing by Catherine Evans)
