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Morgan Stanley Upgrades South Korea, Thailand to Overweight, Moves Australia to Underweight

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Morgan Stanley has upgraded South Korea and Thailand to overweight while placing Australia to underweight, according to a Monday research note.

The equity research firm believes the recent selloff in the South Korean stock market was primarily technical, with leverage unwinding for ETFs already moving past the midpoint.

This has reduced the pressure on the KOSPI index and opened a better entry opportunity to ride an AI and industrial super cycle, Morgan Stanley said.

The research firm has a 9,000 target for the KOSPI, a 36% upside on its current level.

Meanwhile, better macroeconomic policy conditions, earnings inflection, and cheap valuation anchor Thailand's rating, with AI infrastructure and energy security being main structural themes, Morgan Stanley said.

For Australia, a tighter central bank policy rate, a contractionary federal budget, and a structural housing reboot has placed an upside limit on the index, the research firm said.

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