Battle opens for FTSE second place

Debt-laden Vodafone, which was on Monday overtaken as the biggest company in the UK and Europe, is at risk of sliding a further place in the valuation table.

Drugs firm GlaxoSmithKline on Thursday launched a challenge for runner-up position, and briefly overtook Vodafone, before sliding back to third position in afternoon trading.

In midday trading the stock market valuation of the drugs giant, which on Wednesday announced profits of £5.32bn ($7.69m), touched £122.5bn, about £2bn more than that of Vodafone at the time.

But Vodafone shares, which have declined by almost one quarter this month, fought back in afternoon trade.

The firm, one of the many telecoms giants which have paid out huge sums to win licences to operate third generation mobile phones, lost its top spot on Monday to oil company BP Amoco.

Gains from genetics

The rise in GlaxoSmithKline shares followed the release of a company strategy document which predicted earnings growth of 13% this year.

While the firm, formed from a merger of GlaxoWellcome and SmithKline Beecham in December, said disposals required by trade regulators would reduce earnings by 6%, the company expects to make £1.6bn in cost savings through the deal.

And it promised a drive by company researchers to boost its drugs portfolio, including treatments developed through the study of the human genome.

"The company is benefiting from its previous investment in technologies in genetics," GlaxoSmithKline said.

The opening up of the human genetic code was allowing the firm to undertake "exciting" research into an enzyme identified as a "major new risk factor" in heart disease.

The company, which has 117 potential drugs and vaccines in the early stages of development, is also refining new obesity, cancer and osteoporosis treatments, Thursday's statement said.

Shares in GlaxoSmithKline had, by Wednesday's close, risen by 7% this month.

Afternoon trading

At 1425 GMT, the stock stood at 1957p, up 37p on the day, valuing the firm at £121.7bn.

Vodafone shares stood 7.5p up at 190.75p, giving the company a stock market value of £123.1bn

BP Amoco shares stood 3.5p firmer at 571.5p, equating to a market valuation of £129.1bn