Asia Stocks Week Ahead - Fed meet, earnings in focus

By Ian Chua

HONG KONG (Reuters) - Asian stocks may scale new peaks this week if the U.S. central bank lowers interest rates and acts to soothe investor worries that a credit squeeze and housing slump could push the world's largest economy into recession.

But the odds are growing for another pullback in regional markets with the U.S. economy struggling, the dollar weakening and oil prices hitting fresh record highs.

Still, market watchers say the prospect of relatively stronger Asian growth and appreciating Asian currencies are reasons why investors have been flocking to invest in the region.

"Investors are extremely enthusiastic in taking advantage of the perception that this region is in better shape. Domestic conditions are positive," said Hong Kong-based Mark Konyn, chief executive, Asia Pacific, of Allianz RCM asset management unit.

"We saw growth numbers out of China that even with a margin of error, are pretty strong. Hong Kong's economy is doing well, so is Singapore. So the region overall is in pretty good shape."

MSCI's measure of Asia Pacific stocks excluding Japan hit a record high on Oct. 26 and is up more than 70 percent this year.

MSCI's main world equity index has gained a more modest 14 percent and has still some way to go before returning to its Oct. 11 peak.

Earnings will remain a big focus this week, with Nippon Steel, the world's No.2 steelmaker, South Korea's top lender Kookmin Bank and China's top offshore oil and gas producer CNOOC among firms set to report.