European stock markets closed solidly higher on Thursday, encouraged by overnight gains in Asia and as US data proved supportive overall to ease concerns on the economic outlook, dealers said. They said the markets have been jittery for the past several weeks as investors nervous that the recent advance may have been overdone took profits on any bad news while the optimists bided their time. Thin summer trade has also made for more volatility. Peter Cardillo of Avalon Partners said volumes were poor while indicators were telling investors what they wanted to hear -- that the US economy must be out of the recession. A much stronger-than-expected Philadelphia area manufacturing report and a fourth consecutive monthly gain in the Conference Board's composite confidence reading helped Wall Street by offsetting an unwelcome rise in new jobless claimants. Many analysts feel that while the US and other major economies are clearly on the mend after the worst global slump in decades, rising unemployment could undermine any recovery and undo the progress made over the past few months. In London, the FTSE index of leading shares was up 1.43 percent to 4,756.58 points. In Paris, the CAC 40 gained 1.59 percent to 3,505.32 points and in Frankfurt, the DAX added 1.51 percent to 5,311.06 points. In New York, the blue-chip Dow Jones Industrial Average was up 0.33 percent at around 1600 GMT, extending gains as the market welcomed overall positive US data. The Conference Board said its index of leading economic indicators, a measure of economic conditions in coming months, climbed for the fourth month in a row in July, by 0.6 percent. 'The indicators suggest that the recession is bottoming out and that economic activity will likely begin recovering soon,' said Ken Goldstein, economist at the private research firm. The Federal Reserve's Philadelphia manufacturing report meanwhile rose to 4.2 in August, its highest level since November 2007. However, new claims for unemployment benefits rose for the second consecutive week, to 576,000 in the week to August 15, when most analysts had expected a fall to 550,000. 'These are some pretty awful initial claims numbers when you stop to consider that they are still (much higher than) the peak seen in the last two recessions,' said Patrick O'Hare of Briefing.com. 'A protracted period of high unemployment/underemployment remains a key risk to the growth outlook,' he said. In Asian trade on Thursday, Tokyo rose 1.76 percent and Hong Kong rallied 1.88 percent while Sydney inched up 0.09 percent. Asian investors took heart from gains Wednesday on Wall Street and a sharp recovery in Shanghai, up 4.52 percent. Dealers said the Chinese gains were particularly important after recent sustained losses on concerns Beijing might rein in some of its massive economic stimulus project, dampening the prospects for growth in the region and beyond. 'Traders continue to fret over potential policy changes out of Beijing that could place a drag on the global economic rebound,' said Joseph Hargett of Shaeffer's Investment Research. Elsewhere in Europe, Amsterdam gained 1.43 percent, Brussels put on 2.03 percent, Milan was up 1.24 percent, Madrid added 1.84 percent and Swiss stocks advanced 0.86 percent. 