FTSE outperforms Europe but Wall Street fall trims gain

By Alistair Smout and Kit Rees LONDON (Reuters) - UK shares outperformed their European counterparts on Thursday as mining and oil and gas companies rose, although weakness on Wall Street trimmed the gains. The blue-chip FTSE 100 index closed just 10.86 points higher, up 0.2 percent at 6,072.47 points, having been up by more than 1 percent for most of the session. Mining group Glencore epitomised volatility in the broader market. Having risen to nearly 100p in early trade, it reversed that rise of over 7 percent, dropping nearly 5 percent, and closed down 0.6 percent at 91.02 pence. This week the stock has plummeted about 30 percent to an all-time low and rebound the following session after declaring that its business remained operationally and financially robust. "What's stunning with markets at the moment is the degree of day-to-day volatility ... and Glencore is an example of this," Standard Life Investments head of global strategy, Andrew Milligan, said. The FTSE 100 outperformed European indexes, most of which closed in negative territory, tracking U.S. stocks lower. Sentiment was dampened as the U.S. manufacturing sector slowed in September while remaining at its lowest level since May 2013. Similar data from China, the world's biggest consumer of raw materials, showed that its factory activity shrank in September. Traders took heart from that data, however, and are now betting on sector-specific stimulus from Chinese authorities to shore up its manufacturing industry. "Markets are betting on stimulus. We're starting to see policy responses, trying to reassure investors that while growth is slowing, there will be action," Milligan said, citing a cut in tax on car sales this week as an example. Oil companies were among top gainers, with BP rising 2.5 percent and Royal Dutch Shell up 2.4 percent. They retained most of their gains, even after Brent crude slid weakened following the Wall Street opening. It had risen over $49 a barrel as jitters over the situation in Syria countered further signs of an economic slowdown in Asia and rising U.S. inventories. UK mining companies rallied, with BHP Billiton and Anglo American up between about one and two percent after metals prices were buoyed by the Chinese data. Copper rose as traders covered their positions in thin trading. Among the FTSE 250 mid-cap stocks, Tullow Oil rose 9.6 percent after the oil producer said that it retained its $3.7 billion lending facility. Supermarkets were among the biggest fallers following strong gains on Wednesday, with WM Morrison down 2.7 percent, also trading without entitlement to its latest dividend payout. Sainsbury fell 1.9 percent after boosting the sector in the previous session with a rise of nearly 14 percent after it said it would beat profit forecasts. Sector peer Tesco fell 2.7 percent after HSBC cut its target price on the stock. (Editing by Louise Ireland)