Markets rise as recovery hopes mount

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Good morning. European stocks are set to start the week higher on hopes of a quicker-than-expected economic recovery.

It comes as investors await the start of an earnings season that will provide more clues on how companies are coping with the pandemic.

Meanwhile some states in the US, such as Florida and Texas, continue to report record daily increases in virus cases.

5 things to start your day

1) A Telegraph poll found that businesses believe a VAT deferral scheme which expired in June should be extended to help businesses stay afloat as economic pain continues to bite.

2) Halfords has benefited from an uptick in bike sales and expects to gain further as motorists begin driving again, but is pushing ahead with plans to close 60 sites.

3) A consultation on free ports will end this week, but it already faces critique from the industry for being too small in its ambitions. A letter to the Chancellor seen by the Telegraph raises concerns that the plan for only 10 sites will “distort competition”.

4) The gambling industry received a boost from the House of Lords, which said it was “sympathetic” to calls to increase the maximum number of gaming machines allowed in casinos.

5) Smaller accounting firms are likely to follow the Big Four in spinning off their auditing arms, a move which follows a series of scandals around lax auditing practices at British businesses.

What happened overnight

Asian shares crept toward five-month peaks today as investors wagered the US earnings season would see most companies beat forecasts given expectations had been lowered so far by coronavirus lockdowns.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.15pc, having climbed sharply last week on the back of surging Chinese stocks, which added another 1pc on Monday.

Japan’s Nikkei gained 1.7pc and South Korea 1.2pc. E-Mini futures for the S&P 500 rose 0.5pc even as some US states reported record new cases of Covid-19, a divergence that shows no sign of stopping.

EUROSTOXX 50 futures added 1.1pc and FTSE futures 0.8pc.