** Shares of Australian flag carrier Qantas Airways QAN.AX rise 5% to A$11.03

** Stock set for biggest single-day gain since May 5, if current trend holds, and also the top gainer in Australia's S&P ASX 200 .AXJO benchmark index

** Analysts at Morgan Stanley raise PT on the airline to A$12 from A$11.5

** QAN said on Wednesday it will close its Singapore-based budget airline Jetstar Asia, blaming rising supplier costs, high airport fees and strong regional competition

** Brokerage says the closure of Jetstar Asia and recycling of A$500 million ($325.10 million) in capital are positive but are offset by softer capacity, losses from Jetstar Asia and absence of bump from fuel despite favourable moves

** MS keeps "over-weight" rating on stock

** Adds QAN is set to continue to benefit from improved competitive position and is expected to see further demand improvement in FY26

** Stock up 23.4% YTD

($1 = 1.5380 Australian dollars)

(Reporting by Rishav Chatterjee in Bengaluru)

((Rishav.Chatterjee@thomsonreuters.com;))