Every one of Asia's major stock markets ended trading on Wednesday higher, as hopes of a deal between Greece and its creditors were on the rise.
Asian stock markets have been sensitive to any news coming out of Europe regarding the financial crisis that the region has been experiencing. A Greek default could be disasterous to the eurozone economies that are major trading partners of Asia's export driven economies.
Here's how some of the biggest stock markets in Asia performed on Wednesday:
The SSE Composite Index of Chinese stocks jumped 55.63 points, or 2.43%, during trading in Shanghai to end the day at 2,347.53.
The Taiwan Capitalization Weighted Stock Index, or the TSEC weighted index, climbed 162.47 points, or 2.11%, to 7,869.91 during Wednesday trading in Taipei.
The Hang Seng Index of Hong Kong traded stocks rose 319.27 points, or 1.54%, to 21,018.46 on Wednesday.
The KOSPI Composite Index of of Korean stocks was up 22.14 points, or 1.12%, to 2,003.73 by the end of the trading on Wednesday in Seoul.
The Nikkei 225 index of Japanese stocks moved 98.07 points higher, or 1.10%, to end Wednesday trading at 9,015.59.
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Bullish:
Traders who believe that a Greek default will be avoided might want to consider the following trades:
Traders who believe that even if Greece avoids a default this week, the country is just delaying the inevitable may consider alternative positions:
Bullish:
Traders who believe that a Greek default will be avoided might want to consider the following trades:
- If Greece avoids a default, the outlook for European economies will improve greatly, which would also improve the outlook for major Asian exporters like China, Japan and South Korea. Investors who want exposure to a wide range of these countries stocks should consider ETFs like the iShares FTSE China 25 Index Fund FXI, the iShares MSCI Japan Index Fund EWJ and the iShares MSCI South Korea Index EWY. These three ETFs could climb higher if the European Union avoids any defaults.
- Investors who are more interested in individual stocks might consider Toyota Motor Corporation TM, Baidu.com BIDU or LG Display LPL. Each of these stocks will have significant upside if Asia's economic outlook improves.
Traders who believe that even if Greece avoids a default this week, the country is just delaying the inevitable may consider alternative positions:
- The ProShares Ultrashort FTSE China 25 FXP and the ProShares UltraShort MSCI Japan EWV could both move higher if Greece eventually defaults. Greece has been inching closer and closer to default for more than a year now and each step of the way it has secured more concessions. Eventually, European leaders might say that enough is enough. If that were to occur, Asian stock markets could plummet.
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