STOCKS NEWS EUROPE-Pick Germany, Spain as euro recovery bets -MS

German and Spanish bourses are well-placed to benefit from an economic pick-up in Europe while Ireland (Other OTC: IRLD - news) and Switzerland could cash in as the United States recovers, according to Morgan Stanley (Xetra: 885836 - news) 's analysis of the indexes' geographical exposure.

"Investors are increasingly looking for ways to position for the European recovery theme through major equity indices," Morgan Stanley analysts write.

However, their analysis shows that the French CAC, while having the highest Developed Europe exposure among the major indexes, is unlikely to outperform in an economic recovery given the heavy weight of defensives.

In contrast, the German and Spanish benchmarks are well geared to their respective economies, while the broader regional benchmarks such as EuroSTOXX 50 (Zurich: ^STOXX50E - news) should also do well as Europe recovers.

Those betting on a stronger economy in the United States, meanwhile, should consider the Swiss index.

"The combination of an improving U.S. economy and high share in healthcare, which is favoured by relatively undemanding valuations within defensives and a stronger dollar, makes SMI (KOSDAQ: 100660.KQ - news) a good way to position for U.S. exposure," Morgan Stanley writes.

On the downside, Norway and Austria could prove the most vulnerable to an emerging market slowdown, though the former is mostly reliant on Asia while the latter is more geared towards Eastern Europe.

Reuters messaging rm://antonina.vorobyova.thomsonreuters.com@reuters.net