Morgan Stanley upgraded South Korea equities to overweight from equal weight on Monday, setting a KOSPI target of 9,000 — a 36% jump from current levels. The call comes after the benchmark index tumbled more than 30% from its June peak, a rout the bank says was mostly technical.
Why the bank sees a rebound
Morgan Stanley attributed the selloff to forced unwinding of leveraged ETFs, hedge fund deleveraging, and retail margin calls — not a fundamental shift in the economy. The bank expects Samsung Electronics and SK Hynix to provide valuation support, given their beaten-down prices and dominant positions in memory chips. It sees the KOSPI trading in a near-term range of 5,500 to 10,500, leaving room for a sharp recovery if technical pressures ease.
Broader market moves
Elsewhere in Asia, Japan's Nikkei 225 slipped 2.09% to 63,018.33, dragged down by chip equipment makers Advantest and Tokyo Electron. US stock futures rose after President Trump canceled planned strikes on Iran: the S&P 500 added 0.5%, the Nasdaq 100 gained 0.8%, and the Dow rose 0.4%. Oil prices fell sharply — WTI dropped 7.5%, Brent fell 10.0% — while gold edged up 0.7% on peace deal headlines.
Other regional calls
Morgan Stanley also upgraded Thai equities to overweight, citing cheap valuations, AI-related capital expenditure, and energy security. It cut Australia to underweight, pointing to limited upside after rate hikes and property tax reforms.
The KOSPI itself has been volatile. It rallied 18% on Friday only to reverse course Monday, closing at 6,304.80, down 4.41%. Samsung Electronics fell 7.43% to 243,000 won; SK Hynix dropped 7.51% to 1,589,000 won. The index's wild swings underscore how quickly sentiment can shift — and how much ground Morgan Stanley's 9,000 target implies it has to cover.
