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Friday May 11, 4:03 PM Asia Stocks Week Ahead-Cautious, eyeing China HONG KONG, May 11 (Reuters) - Growing caution that a market correction is just around the corner may keep Asian stocks under pressure in the week ahead, but market watchers say the longer-term uptrend remains intact. China, Hong Kong, South Korea, Australia, Singapore, Malaysia, and Indonesia all hit fresh peaks before a late week sell-off after U.S. retailers reported their weakest April sales on record, renewing concerns about the U.S. economy, Asia's top export market. "I expect the correction to continue. This year, sell in May and walk away still applies. So we're going into a consolidation phase," said Hong Kong-based Louis Wong, research director at Phillip Securities. All eyes are on China's consumer price data due on Monday, with any acceleration in inflation likely to raise worries about further policy action by the central bank. Traders are also keeping a close eye on the mainland Chinese stock market, which has risen more than 50 percent so far this year, following last year's 130 percent surge. -- FACTORS TO WATCH (FOR WEEK STARTING MAY 14) Monday - Adobe Systems Q2 Tuesday - April consumer prices - Earnings: Applied Materials Inc., Wal-Mart Stores Inc. - Fed Chairman Ben Bernanke speaks before the Federal Reserve Bank of Atlanta 2007 Financial Markets Conference Wednesday - April housing starts, building permits - Hewlett-Packard Q2 Thursday - Bernanke speaks before the Federal Reserve Bank of Chicago 43rd annual conference on Bank Structure and Competition Friday - Reuters/UMich consumer sentiment -- Japan stocks are seen taking their cues from a series of economic indicators due during the week in both Japan and the United States, one of the biggest markets for Japanese goods. The Nikkei may try for the 18,000 level, supported by solid corporate earnings results and recent advances in global markets, said Kenichi Hirano, operating officer at Tachibana Securities. "The market is solid enough to take the series of data favourably unless it produces huge surprises," he said. Monday - Earnings: Isuzu Motors Ltd., Pioneer Corp., NEC Electronics Corp., EAccess Ltd. - April corp goods price; March current account Tuesday - Earnings: Daiichi Sankyo, Eisai Co. Ltd. Astellas Pharma Inc., TDK Corp - Machinery orders for March Wednesday - Earnings: Hitachi, Sony Corp. - BOJ starts two-day policy-setting meeting - Revised industrial output for March Thursday - Earnings: Sumitomo Realty & Development, Rakuten - BOJ meeting ends, BOJ governor news conference - BOJ monthly economic report; Reuters tankan - Preliminary GDP for January-March Friday - March tertiary activity; revised leading indicator -- Korean shares are seen vulnerable to falls amid worries that a record-setting rally in the benchmark KOSPI has become unsustainable, with some of the leading gainers such as POSCO seen vulnerable to a retreat. Investors will also be paying close attention to Chinese markets, amid worries its government will intervene to stamp down a surge in its shares, potentially having a knock-off effect in markets in the region. "A rally that is driven more by sentiment than fundamentals is unpredictable. Next week we could be moving according to global markets such as China and the U.S.," said Kim Hak-kyun, an analyst at Korea Investment and Securities. Sunday - April import/export price data, noon (0300 GMT) Wednesday - April unemployment rate, 1:30 p.m. (0430 GMT) -- In Hong Kong investors are bracing for more declines following a volatile week amid worries that U.S. and mainland stock markets were getting too far ahead. "There's still more pressure on the downside," said Ernie Hon, strategist at ICEA Securities. Hon said the blue-chip Hang Seng Index could hit 20,000 points, which is just above the 50-day moving average. Tuesday - Results from Star Cruises Ltd Wednesday - Results from Tencent Holdings Ltd Thursday - Composite interest rate at April-end; unemployment data for Feb-Apr Friday - Q1 GDP data - Pacific Textiles Holdings market debut -- Australian shares are set for further declines with the absence of a widely rumoured $100 billion-plus bid by top miner BHP Billiton for rival Rio Tinto likely to dampen sentiment. "A lot of premium given to merger and acquisition activities, especially BHP and Rio Tinto, which has been holding the market up, has been unwound," said Martin Arnold, equities economist at Commonwealth Securities. "When some of the talk does die down, that is going to generate some consolidation and slow the pace of the rally." Monday - March housing finance data 0130 GMT Tuesday - Macquarie Bank's 2006 full-year results Wednesday - Westpac consumer sentiment May 0030 GMT - Wage price index Q1 0130 GMT (1130 am) - CSR 2006 full-year results Thursday - The Reserve Bank of Australia bulletin 0130 GMT - Coles Group Ltd. Q3 sales - Lion Nathan H1 results - AMP Ltd. annual shareholders meeting -- In Taiwan shares of technology exporters are expected to bounce back in the new week, after a slide on Wall Street knocked the sector down on Friday. "The index was hit after the U.S. drop, but its a short-term effect and should only last until early next week," said Mega Securities assistant manager Cliff Chuang. The TAIEX is likely to trade between 7,950-8,150 points, Chuang added. Wednesday - Fitch Ratings Global Structured Credit Conference -- In Southeast Asia worries about the health of the U.S. economy and quarterly corporate earnings are expected to keep stock markets across Asia volatile. "The markets here have become quite sensitive to the outlook of the U.S. economy. I think we can see some more volatility next week as well," said Najeeb Jarhom, head of research at Fraser Securities. Monday - Earnings: Singapore's Neptune Orient Lines, City Developments - Market holiday in the Philippines Thursday - Public holiday in Indonesia -- Indian stocks are set for range-bound trading as investors eye overseas markets for cues, with earnings from motorcycle maker Bajaj Auto Ltd. and truck and car maker Tata Motors Ltd. closely watched. "With the way the global markets had gone up and now they're seeing a correction, I think the Indian markets will also reflect the trend in the coming sessions," said Avinash Gorakshakar, head of research at Emkay Share & Stock Brokers. "I don't think the market will run up sharply from this level. It will remain more or less sideways with a weaker bias. The next buying trigger will come from the monsoon. If the monsoon indications are good, then the market may get excited." Thursday - Bajaj Auto quarterly earnings Friday - Tata Motors quarterly earnings -- TABLE OF INDEX PERFORMANCE: (MAY 11, at 0700 GMT) Latest % change week ytd* 2006 Nikkei 225 17,553.72 +0.91 +1.90 +6.92 KOSPI 1,603.56 +2.28 +11.79 +3.99 S&P/ASX 200 6,297.40 -0.12 +11.07 +19.03 TAIEX 8,031.54 -0.43 +2.66 +19.48 HANG SENG 20,514.62 -1.57 +2.75 +34.20 STI 3,454.66 -0.89 +15.70 +27.20 SENSEX 13,824.26 -0.79 +0.27 +46.70 SSE COMP 4,021.68 +4.70 +50.32 +130.43 *year-to-date -- (Additional reporting by Geraldine Chua in SYDNEY, Rita Chang in HONG KONG, Sheena Lee in TAIWAN, Aiko Hayashi in TOKYO, Sumeet Chatterjee in MUMBAI, Ovais Subhani in SINGAPORE and Rafael Nam in SEOUL)