BUZZ-European stocks: strategists looking for cyclical turnaround

** European equity strategists see cyclical stocks rebounding after several months of lagging against more defensive names

** Cyclical sectors (MSCI (NYSE: MSCI - news) consumer discretionary, financials, industrials, IT (Other OTC: ITGL - news) and materials) have given up 7 pct against defensives (consumer staples, energy, healthcare, telecoms and utilities) since mid-March, but have shown signs of rebounding during the recent China-led sell-off. Chart: http://link.reuters.com/rad55w

** JPM notes cyclical underperformance has overshot eurozone PMI over a longer term period. Chart: http://link.reuters.com/zad55w

** Eurozone M1 money supply, a leading indicator of PMI, still expanding

** Credit Suisse (Other OTC: CDSSF - news) also notes potential for a cyclical rebound, says to avoid export-related plays in favour of stocks capturing increased domestic demand

** Broker cites themes including employment agencies (Hays , Adecco (VTX: ADEN.VX - news) , SThree ), Italian autos, retail banks (Intesa Sanpaolo (Amsterdam: IO6.AS - news) and Sabadell ) and software (SAP (Amsterdam: AP6.AS - news) ) (RM (LSE: RM.L - news) : alasdair.pal.thomsonreuters.com@reuters.net)