1026 GMT - European equities are set to perform in line with global peers after a period of underperformance, Bank of America strategists Sebastian Raedler and Thomas Pearce say. European stocks have underperformed global peers by 4% over the past month they say, amid pressure from higher 10-year Treasury yields and slower European growth. The continent's stocks should now keep pace with peers from a low starting point, they say. However, risks remain. The risk premium investors demand for holding European stocks has remained at historically low levels, leaving stocks vulnerable to any wobble in the dominant AI market narrative, the strategists say. The Stoxx 600 could fall as much as 7% into the second quarter of 2027, they say. The index rises 1% Friday, after falling 3.7% over the past month.