Strait of Hormuz Reopening Boosts European Airlines and Luxury Stocks

Strait of Hormuz Reopening Boosts European Airlines and Luxury Stocks

According to Morgan Stanley analysts, European airlines, aerospace, and luxury goods companies are among the sectors best positioned to benefit from progress in U.S.-Iran talks to reopen the Strait of Hormuz.

Energy-Intensive Sectors Also Poised to Gain

Analysts say energy-intensive construction and auto stocks will also rally if peace talks advance. More broadly, Europe is expected to break out of a relative slump if the crucial waterway reopens.

'We would expect a continued EU equities recovery on any deal progress following material underperformance vs U.S., muted flows since the Iran escalation and healthy earnings growth,' the analysts write. The Stoxx 600 has yet to close above the record high it hit on Feb. 27, the last trading day before the U.S. and Israel launched attacks on Iran.