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LONDON (Alliance News) - UK shares held onto their early gains to end slightly higher Thursday, led by a continued recovery in commodity-related stocks, but major indices in Europe closed down and US stocks were in the red at the London close, hit by a decidedly mixed set of manufacturing sector readings from around the world.

The FTSE 100 index ended up 0.2% at 6,072.47 points, the FTSE 250 up 0.5% at 16,763.65, and the AIM All-Share up 0.2% at 726.65.

"The jubilant start to the fourth quarter proved to be as unwarranted as it always seemed, with a day full of dismal manufacturing data gradually wearing down even the most optimistic of investors," said Spreadex analyst Connor Campbell.

UK stocks started the session higher, as a more stable set of Chinese economic data increased investors confidence. But manufacturing readings from several European countries and mixed data from the US weighed on stocks by the end of the session, pushing UK shares off their highs.

In Europe, the French CAC 40 index and the German DAX 30 ended down 0.6% and 1.5%, respectively.

On Wall Street at the London close the Dow 30 was down 0.6%, the S&P 500 down 0.4% and the Nasdaq Composite down 0.6%.

The Hong Kong and Shanghai markets were closed for Chinese National Day Thursday. Hong Kong will reopen Friday, while Shanghai will remain closed for a week to celebrate the festival. The Japanese Nikkei 225 index closed 1.9% higher.

The latest report from the National Bureau of Statistics showed that the manufacturing sector in China continued to contract in September, albeit barely, with a purchasing managers' index score of 49.8. That beat forecasts for a reading of 49.7.

A separate report from Caixin also showed that China's manufacturing sector continued to contract in September, with a final manufacturing PMI score of 47.2, also beating expectations for 47.0.

Outside Asia, there was a flurry of manufacturing PMI readings from several European countries.

Eurozone manufacturing activity grew at a slower pace as estimated in September, data from Markit showed. The manufacturing PMI fell to a five-month low of 52.0 in September from 52.3 in August. The reading came in line with the economists estimate.

Germany's manufacturing PMI dropped to 52.3 in September from 53.3 in August, while expectations were for 52.5. The data signalled a slowdown in new orders and production growth in September. However, French manufacturing activity increased for the first time in three months. The French manufacturing PMI came in at 50.6, up from 48.3 in August. It was above the expectations of 50.4.

In the US, the Institute for Supply Management's reading on activity in the US manufacturing sector fell to a two-year low in September. The ISM said its purchasing managers index dropped to 50.2 in September from 51.1 in August. Economists had expected the index to dip only to 50.5.

Meanwhile, the US Labor Department released a report on Thursday showing first-time claims for US unemployment benefits rose by more than expected in the week ended September 26.

The report said initial jobless claims climbed to 277,000, an increase of 10,000 from the previous week's level of 267,000. Economists had expected jobless claims to edge up to 270,000. Meanwhile, the report said that continuing claims, a reading on the number of people receiving ongoing unemployment assistance, slid by 53,000 to 2.191 million in the week ended September 19.

Investors will look Friday to US nonfarm payrolls data, due at 1330 BST, as they look for clues on whether the US Federal Reserve will raise US interest rates in its next monetary policy decision, scheduled for October 28.

In the UK, manufacturing activity expanded at the weakest pace in three months in September, survey figures from the Chartered Institute of Procurement & Supply and Markit Economics showed. The PMI fell slightly to 51.5 in September from 51.6 in August, which was revised up from 51.5. Economists had forecast the index to fall to 51.3. Any reading above 50 indicates expansion in the sector.

On the London Stock Exchange, miners managed to stay in the green at the end of the session, but not Glencore which ended down. The miner had enjoyed two days of strong gains on Tuesday and Wednesday, having dropped by 29% on Monday. It ended down 0.6% on Thursday, ending its rally.

BHP Billiton ended up 2.4%, Fresnillo closed up 2.1% and Randgold Resources finished up 1.8%.

Oil-related stocks also gained despite crude prices experienced a sharp decline at the end of the session. Brent oil was at USD48.20 a barrel at the London close, while West Texas Intermediate was at USD45.35 a barrel.

BP, up 3.3%, Royal Dutch Shell 'B' shares, up 2.4%, and BG Group, up 1.6%, were among the best blue-chip performers.

Royal Dutch Shell on Thursday said it has sold some of its downstream business in Norway, but said its brand will remain "highly visible" and said the country remains an "important country" for the company. Shell has sold Smart Fuel, its retail, commercial fuels and supply and distribution logistics businesses in Norway, to St1 Nordic, but said the Shell brand will continue through a retail brand licence agreement.

Supermarkets ended lower as investors took profits following gains on Wednesday. The whole sector had been buoyed by J Sainsbury, which said its full-year underlying pretax profit will be "moderately ahead" of consensus after it achieved growth in sales in the second quarter of its financial year. Sainsbury's had closed up 12% Wednesday on the news, while Tesco rose 7.0% and Morrisons 6.0%.

On Thursday, Wm Morrison Supermarkets ended down 2.7%, Sainsbury's down 1.9%, and Tesco down 0.7%.

In the FTSE 250, Tullow Oil ended at the top of the mid-cap index, up 9.6%. The oil and gas company said its banks have completed their reserve-based lend redetermination process and said its financing arrangement remain the same as a result.

Tullow said is available debt capacity remains at USD3.7 billion. At the end of September, the company had cash and undrawn credit facilities totalling USD2.1 billion with headroom and no near-term maturities. Numis also added Tullow to its Top Picks, according to traders.

In a light UK corporate calendar Friday, FirstGroup and Electrocomponents issue trading updates.

In the economic calendar, the UK construction purchasing manager's index is due at 0930 BST, while the eurozone producer price index is expected at 1000 BST. In the US, alongside the nonfarm payrolls and unemployment rate, due at 1330 BST, there are factory orders at 1500 BST. US Federal Reserve Vice-Chairman Stanley Fisher gives a speech at 1800 BST.

By Daniel Ruiz; danielruiz@alliancenews.com

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