Woofun AI reports that Citigroup has upgraded its rating on China from neutral to overweight, citing potential benefits from market diffusion if oil prices decline and global growth improves. Conversely, the bank downgraded South Korea from overweight to neutral due to increased volatility in semiconductor and memory sectors, despite strong fundamentals. Citigroup maintains an overweight stance on Taiwan, driven by expanded AI demand across GPUs, ASICs, and packaging.

The bank projects the MSCI Emerging Markets Index to reach 1870 points by end-2026, representing a 12% increase from current levels, with a mid-2027 target of 2050 points. Emerging market earnings are expected to grow 63% in 2026, primarily fueled by the technology sector. Citigroup notes that forward P/E ratios for emerging markets remain near long-term averages, with South Korea and Brazil appearing relatively cheap compared to Taiwan and India.