Morgan Stanley has raised its end-2026 target for South Korea’s KOSPI index to 5,200, up from 4,500, citing strong earnings momentum and structural reforms. The investment bank now leans toward its bull-case scenario of 6,000, with a bear case at 4,200. It also set a new three- to six-month trading range of 4,600 to 5,800.

The revision reflects Morgan Stanley’s view that South Korea remains one of Asia’s best-positioned equity markets. Analysts point to super-cycles in technology and industrials, improving earnings revision trends, and ongoing government-led corporate reforms. They expect earnings growth to be front-loaded in 2026, supported by a semiconductor recovery and strong demand tied to AI and energy transition themes.

Despite the KOSPI’s sharp rally since late 2025, approaching the 5,000 level, analysts expect any near-term pullback to be shallow and temporary. They note that geopolitical risks have historically caused short-lived volatility for Korean equities. Morgan Stanley reiterated overweight positions in information technology, industrials, and autos, while remaining constructive on financials, particularly securities firms.