Asian Markets Surge After Greece Passes Austerity Measures: How to Profit

Asian stocks climbed higher again during Friday trading in Asia, as the markets reacted positively to the Greek Parliament passing a second set of austerity measures that allowed Greece to receive the latest 12 billion euro ($17 billion) installment of its emergency loan from the European Union (EU) and the International Monetary Fund (IMF). Last year, a 110 billion euro bailout for Greece was approved by the European Union and the International Monetary Fund but earlier this week the EU demanded that Greece pass a set of austerity measures aimed at increasing the government's revenue and reducing its expenses. The European Union said that failure to pass the measures would show that Greece wasn't doing enough to solve its fiscal crisis, so the EU would withhold bailout funds to Greece. Without the 12 billion euros of bailout money, Greece would have soon run out of money to pay its debts and would have likely defaulted within a month. Asian markets cheered the news that the Greek Parliament passed the austerity measures because a Greek default could have led to other troubled eurozone countries like Portugal, Ireland and Spain following suit. That scenario would have put the future of the euro as a currency in doubt and likely would have led to a drop in exports from Asia to Europe. The European Union is one of the most important trading partners of the export-driven Asian economies and any financial crisis that the Europeans faced would most likely be felt in Asia as well. As concerns over Greece eased, most Asian stock markets climbed higher during trading on Friday in Asia. The Nikkei 225 index of Japanese stocks ended Friday trading up 51.98 points, or 0.53%, at 9,868.07. The SSE Composite Index of stocks traded on the Shanghai Stock Exchange was one of the only Asia/Pacific stock market indexes to end Friday lower than the previous trading day's close. The SSE Composite Index fell 2.71 points, or 0.10%, to end Friday trading at 2,759.36. The KOSPI Composite Index of Korean stocks climbed 25.05 points higher, or 1.19%, to end the Friday trading session at 2,125.74. The TSEC weighted index of Taiwanese stocks rose 87.23 points, or 1.01%, to reach 8,739.82 by the end of Friday. The Straits Times Index of the Singapore stock market moved 18.57 points higher, or 0.60%, to end the day at 3,139.01. There are a number of ways to trade on the news that Asian stock markets continue to move higher following the news that Greece has, at least for the time being, avoided a default. Investors who would like to invest in a broad range of stocks from specific Asian economies may want to take a look at the iShares MSCI South Korea Index EWY, the iShares MSCI Hong Kong Index EWH and the iShares MSCI Singapore Index EWS. Each of these ETFs gives investors the ability to own a wide range of stocks from a single, growing Asian economy that stands to benefit from the passage of the latest round of austerity measures by the Greek Parliament. However, there is still a great deal of risk that Greece or one of the other troubled European Union members will default on their national debts. If this were to occur, it could be disastrous for Asian economies. Investors who feel that the European Union is still likely to see one or more of its member states default may want to take a look at the ProShares UltraShort MSCI Japan EWV and the ProShares Ultrashort FTSE China FXP. The share prices of these two ETFs rise whenever Chinese and Japanese stock markets take a dive. Exports to Europe are extremely important to the economies of Japan and China. If a financial crisis were to hit the European Union, the Japanese and Chinese economies would be sure to see a drop off in exports. If this were to happen, most of the stocks of these two countries biggest corporations would likely see tremendous downward pressure.