Market Report: Ionica stages a recovery but still has a long way to go

Any share which more than doubles in the seven trading days of Christmas should have enjoyed a truly joyful ride.

But not Ionica, which climbed from 60p to close at 134.5p, up a further 11p. It remains desperately short of any festive cheer. For the fledgling telephone group's recovery has to be seen against a horrendous slide - from 421p.

Since a 390p summertime flotation it has persistently dialled the wrong numbers. As the shares weakened the company produced the sort of gloomy statement which rests uneasily with an expected high flyer. Its problems were then compounded by its sudden and unexpected removal from the FTSE 250 index, which forced tracker funds to unload.

The group's discomfort made it an easy target for bear raiders, who piled on the agony by selling short.

But the stock market is a fickle place. As the bears retired with their profits the telephone group's directors appeared as buyers. The long retreat was over.

During the slide there was wild talk that the group was in danger of breaching its banking covenants and was facing a showdown with institutions. Such suggestions were hotly denied and with more than pounds 200m in the bank, seemed absurd.

But Ionica faces problems and was clearly overpriced in the summer. It has admitted its national roll-out is nine months behind schedule and teething troubles are restricting capacity and limiting customer sign- ups.

The rest of the market, in yet another round of thin trading, scored modest gains which, of course, will help year-end portfolio valuations. Footsie, after 32.4 points, ended 19.9 up at 5,132.3. The supporting indices also made headway.

Today's Footsie calculations are, for the first time, to be adjusted by the Stock Exchange if it feels final prices are not representative. The decision to fine tune year-end prices, used for portfolio valuations, is a clear indication that even the Exchange is prepared to concede the shortcomings of its new order-driven trading system. With many funds using quarterly valuations it would follow the Exchange should carry out price adjustments at least every three months.

Doubts returned about seasonal spending, sending most retailers lower. Marks & Spencer lost 13p to 597p and Tesco 11p to 496p. The cautious nature of Littlewoods' trading statement caused the disquiet.

Still Wickes, the do-it-yourself chain, rose 3.5p to 277.5p - the shares have more than doubled since April's low - and MFI, the furniture group, added 7p to 119p.

Buying in a thin market lifted the non-voting shares of the Schroders investment group 101p to 1,781; the voting stock gained 35p to 1,935p.

Harrisons & Crosfield hardened 6.5p to 139p following its US buy and decision to return 56p a share to shareholders. On Friday H&C, under the name of Elementis, switches from the conglomerate to chemical sector.

An IT sector will make its debut on Friday. The signalled constituents have attracted attention. Logica put on 40p to a 1,130p; FI Group rose 17.5p to 932.5p and Lynx 7p to 116.5p. Each reached a new high.

Relegation-threatened Tottenham Hotspur was back to a year's low as worries about coach Christian Gross nudged the shares 1p to 75.5p. In January the price was 138p.

Tullow Oil dipped 5p to 137p after abandoning a Pakistan well; another well tested gas at commercial rates and was suspended as a future producer. There were rumours Tullow (and Cairn Energy) will hear today about developments in Bangladesh.

Arcadian International, the hotel chain, held at 60p; it said talks with a possible bidder had reached an "advanced stage".

Gartland Whalley & Baker, owner of 27 per cent of bid-threatened Independent Parts, gained 5p to 110.5p.

Parkwood, a facilities management group, held at 46.5p against last year's 65p placing. Two weeks after the shares were hit by a profit warning, chief executive Tony Hewitt increased his stake to 47.9 per cent, buying just under 1 per cent at 45p.

Expectations of corporate action lifted Cambridge Mineral Resources 0.25p to 16.75p.