I actually haven't watched For a Few Dollars More in a long time, so I don't remember how long Manco was with Indio's gang but maybe he saw Indio with the pocket watch when he was with the gang, saw the connection with Mortimer's watch and snatched Mortimer's watch so that, if Indio had something against him or knew him(thinking from Blondie's perspective) wouldn't try anything quick or hostile on him when he made his to Indio's gang? Not that it stopped them from beating them...