Morgan Stanley analysts note that European equities would be the most sensitive market to the reopening of the Strait of Hormuz, should diplomatic progress between the US and Iran continue. Industries such as airlines, aerospace, construction, luxury goods, and banking are expected to benefit the most. The firm maintains an overweight rating on the banking, semiconductor, and capital goods sectors, and points out that France's CAC 40 index shows the strongest positive correlation with the Strait's reopening among European markets.