Market report: Smaller companies join the party as Footsie soars

Although most bargain hunters were busy offering a little belated seasonal cheer to retailers, a few strayed into the stock market, helping to send Footsie 98.5 points higher to 5,112.4.

For once the partying was not confined to blue chips. The FTSE 250 index rose 34.1 to 4,732.2 and the FTSE SmallCap index put on 6.8 to 2,296.8.

A few buyers nibbling here and there; futures activity, the usual array of new year tips as well as a strong New York opening combined to give an unexpected fillip to a session which most observers expected to be empty and downbeat.

But trading was thin. BG's buying-in of 236.7 million "B" shares, created to return cash to shareholders, accounted for much of the 512.5 million turnover. BG rose 4.5p to 280p.

Retailers responded to indications that Christmas trading perked up in the final days and the sales had got off to a good start.

Although few believe the gap in the festive sales volume will be completely closed, there is a growing feeling the market may have overdone the gloom factor.

So Marks & Spencer rose 29p to 610p; Argos 21.5p to 556.5p and Boots 18p to 878p. Others higher included Carpetright, 15p to 440p, and Next 12p to 691p. Tesco jumped 23.5p to 507p and Safeway, largely on takeover hopes, improved 11.25p to 338.25p.

Jeweller Goldsmiths, with a confident Christmas trading statement, sparkled 12.5p to 275p and encouraged support for Signet, the old Ratners jewellery chain, up 0.75p to 28.75p.

Engineer Siebe, 80p higher at 1,190p, was the best performing blue chip. Insurers Sun Life & Provincial and GRE were not far behind. Only seven blue chips gave ground.

Drink and leisure shares were cheerful but Matthew Clark, the under-performing cider and wine group, had a sobering time. The shares were at one time down 9.5p, ending off 3p at 163.5p, a closing low. Before its trendy cider sales were hit by the short-lived alcopops craze the shares topped 800p.

Takeover action continued on the under card. Independent Parts jumped 20.5p to 134.5p as mystery bidders - the existing management is probably one - were said to be hanging around with a 140p offer. The car parts group is the creation of Gartland Whalley & Baker, which specialises in nursing companies for a quote. GWB, up 2p at 105.5p, has 27 per cent of IP.

Long time sufferer Enviromed, a healthcare business, also attracted takeover excitement. The shares ended 2.5p higher at 8.5p after the company was spurred into action by a 3p jump. It said it had been involved in talks which had ended "some months ago". Tantalisingly it added it could not rule out an offer but then said the price it had discussed was "at a substantial discount" to the current price, presumably 6p.

United Biscuits hardened 10p to 220.5p, probably reflecting a revival in long-standing takeover hopes.

McBride, a maker of washing up liquids, held at 177p as investment group FMR bought 1.8 million shares, lifting its stake to 5.51 per cent.

Langdons, the tea and coffee group, gained 0.25p to 2p as three directors picked up some of the shares unloaded by Plantation & General, which still has 11.51 per cent.

Ionica's recovery continued. The fledgling telephone group rang a 20.5p gain to 123.5p. Earlier this month bear raiders drove the shares to 60p. They reached 421p after a 390p summertime flotation.

Waterfall, the snooker club chain, rose 9p to 81p; expectations are growing that European Leisure, with 18.5 per cent, is preparing a bid for full control. EL held at 135p.

Reflec, the refective ink group hit last week by a profit warning, recovered 7p to 16.5p; the shares have been as high as 126.5p.

Biocompatibles International gained 30p to 485p after winning European regulatory approval for its coronary stents (which support the walls of an artery), and ML Laboratories, down from a 468.5p peak, hardened 8.5p to 84p.