By Rowena Mason Last Updated: 3:17PM BST 02 Apr 2009  The FTSE 100 was up 3pc by mid afternoon, climbing above 4,000 for the first time in five weeks, as Nationwide's house price figures showed a 0.9pc increase last month for the first time since October 2007. The report on house prices sent the pound higher against the dollar, euro and yen, up 0.6pc to $1.4554.  The markets were cheered further by a Bank of England survey indicating that credit conditions are finally starting to improve, with lending to companies up "slightly" over the first quarter of 2009.  In the US, Treasury Secretary Timothy Geithner said he believed that there were "encouraging signs" that gloom surrounding the financial markets was finally lifting ahead of the G20 summit. US manufacturing data showed inventories coming into line with consumer demand for the first time in months.  Equity and currency traders said the more positive economic data was boosting the FTSE and sterling, expressing scepticism in the City that the G20 would find a solution for the world's financial woes.  "The FTSE's rally is more to do with UK house prices than the G20," said Andy Lynch, head of equities at Schroders. "Much as Gordon Brown would like to attribute the rises to his efforts, I suspect everyone will look at the G20 communique later and yawn."  The markets remained buoyant despite the European Central Bank cutting interest rates by less than expected. Already under fire for reacting slowly to the crisis, the ECB cut rates by a quarter point to 1.25pc. Markets had pencilled in a half point cut.  "I think this is giving a broad sense of relief and optimism across the market," said Ardash Sinha, a currency expert at Barclays. "It has to do with the fact that general economic data, like house prices, is better than expected. Risk positive currencies like sterling are doing well, but we're not really expecting the G20 to agree on a co-ordinated stimulus plan."  However, Howard Archer, chief economist at Global Insight, warned against reading too much into the rise in house prices, pointing out that the market is extremely volatile.  "Housing market activity remains extremely low and any pick up in activity over the coming months is likely to be gradual and fitful given ongoing very poor economic fundamentals and still tight credit conditions," he said.
Global markets have rallied strongly on optimism over new house price and manufacturing data rather than hope that the G20 may solve the financial crisis, according to traders.