Stockmarkets: Signs of Recovery

Global stockmarkets rose yesterday as the G20's $1tn boost to the world economy added to growing optimism in dealing rooms that the world may have turned a corner.

The FTSE 100 index rose 4.3% to stand above 4,000 for the first time since February, while Wall Street's Dow Jones Industrial Average went above 8,000, with gains of nearly 4% by midday in New York.

Investors were buoyed by the G20's plans, which include a banking clean-up and a $1tn dollar pledge for the International Monetary Fund and World Bank.

Stockmarkets around the world pushed higher during the day as news on the communique trickled out of the G20 meeting in London. France's CAC 40 rose 5.3%,; Germany's Dax gained 6%; and Japan's Nikkei was up 4.4%. The price of oil went over $52 a barrel.

The first signs of a possible recovery also crept into the British and US economies with the release of some encouraging data. In the UK, the Nationwide building society reported that house prices increased by 0.9% in March, the first rise in its data for 16 months, and slowing the annual rate of decline to 15.7%.

The lender cautioned against reading too much into one month's figures, but two leading banks have also eased their loan criteria, making mortgages more affordable.

Activity in the UK construction industry also picked up from a record low.

In the US, there was a surprise increase in factory orders, and data showed that manufacturing activity in the US was shrinking at a slower pace during March.

CMC Markets analyst James Hughes said: "News on both the domestic and international agendas [is] giving traders cause to cheer."