Asia Stocks Week Ahead - Earnings seen providing fresh cues

By Ian Chua

HONG KONG (Reuters) - Investors are likely to turn increasingly cautious after having pushed Asian stocks to fresh peaks for a third straight week, but the underlying tone remains firm thanks to diminishing worries about a global credit squeeze.

Markets will take their cues from profit reports as major firms such as Samsung Electronics, the world's top memory chip maker, Infosys Technologies, India's No. 2 software services exporter, as well as key U.S. names including aluminium company Alcoa Inc post quarterly results.

Financial markets in mainland China resume trading after a week-long break for the National Day holidays.

Given strong regional economic growth and valuations that are still reasonable, albeit no longer cheap, analysts say the outlook for Asia remains generally positive.

Taiwan, for example, is particularly attractive compared with its Asian and global peers, some market players say.

It is a "market which I continue to think is undervalued and shows the world's highest earnings per share growth this year," said Burkhard Varnholt, chief investment officer at Swiss asset manager Bank Sarasin.

MSCI's measure of Asia Pacific stocks excluding Japan has risen in the past seven weeks, reaching successive record highs in the last three.

It has rallied more than 30 percent from the August low after interest rate cuts by the U.S. Federal Reserve helped soothe fears of a global credit shortage stemming from the U.S. subprime mortgage market crisis.