NEW YORK (Reuters) - Tobacco-related shares gained some ground on Wednesday morning in anticipation that George W. Bush will prevail in the closest U.S. presidential election in history, analysts said.

A win for the Republican Texas governor could give tobacco stocks a boost on expectations that his administration would be less hostile toward the tobacco industry than a Democratic administration, according to analysts. In morning trading, shares of leading cigarette maker Philip Morris Cos. Inc., a Dow Jones industrial average component, were up $1-5/16 at $36-9/16. R.J. Reynolds Tobacco Holdings Inc. also climbed, adding $1-1/8 to $36-1/8. Both stocks were close to 52-week highs. The American Stock Exchange's Tobacco index, comprised of Philip Morris, R.J. Reynolds and seven other tobacco-related issues, was up 6.84 points, or 2.64 percent, to 266.18, a new 52-week high. ``We believe there is considerable upside for the stocks over the next couple of years'' in the event of a Bush victory, said Credit Suisse First Boston analyst Bonnie Herzog. Herzog, who spoke on Tuesday before the election result was known, said she sees a 15 to 20 percent upside for tobacco stocks over time with a Bush victory. While litigation concerns, particularly the Engle sick-smokers case in Florida, have surrounded the industry over the past several months, analysts have repeatedly said legal woes are already built into the valuations of tobacco stocks. ``The election is a much bigger driver here in the short run than Engle,'' Sanford C. Bernstein analyst William Pecoriello said, also speaking on Tuesday. ``Obviously, a Republican win will move tobacco valuations significantly higher from here.'' Pecoriello said it would be more likely for Bush, rather than Democratic presidential candidate Vice President Al Gore, to find ``some common ground with the industry.''

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