If the eurozone crisis were to suddenly re-ignite and rapidly worsen, cyclical companies would likely fare better than those in more defensive sectors, suggests Fitch Ratings in a new report.

The rating agency says that in a hypothetical scenario, simulating a rapid re-acceleration and prolonged worsening of the eurozone crisis, it found that cyclicals showed more resilience than traditional defensive sectors.

“European steel companies are a good example – vulnerable to downgrade action, but to a lesser degree than more defensive sectors such as utilities and telecoms,” it says.

In such a scenario, Fitch found that the impact on ratings would be higher than the actual downgrade rate which followed the onset of the global financial crisis in 2008, but that the effects would be distributed in a sharply different manner across sectors.

Fitch notes that its analysis recognizes that the economy is not in the same position as in 2008. “Generally, corporate leverage is lower and liquidity better; and there are fewer companies with ‘M&A overhangs’ from the earlier boom,” it says, adding that the steel sector in particular will be insulated by lower inventory levels than in the previous crisis.