Morgan Stanley strategists said semiconductors, technology hardware and capital goods would benefit most if the rolling bear market in European equities reversed, even as broad European indexes remained near record highs. According to Sina Finance, a team led by Marina Zavolock said semiconductors had by far the greatest sensitivity to such a reversal, followed by technology hardware, capital goods, metals and mining, and discretionary retail; defense, real estate and construction ranked lowest. The strategists said the recent market pullback had been excessive: European banks and other cyclical stocks had fallen about 13% relative to defensive sectors, while the spread between strong- and weak-momentum stocks had narrowed about 14% from its June peak. The report said European AI infrastructure stocks had underperformed the MSCI Europe index by as much as 29% since their June peak, while the ratio of AI infrastructure stocks to AI-stressed stocks had fallen by as much as 42%.