The next big aftershock from Taiwan's killer quake may hit the Taipei Stock Exchange, where traders expect shares to fall as far as the rules allow when trading resumes Monday.
The government has kept the market closed since disaster struck in the wee hours Tuesday.
Many traders around the island could not trade because their electronic dealing systems had no power -- and officials said investors were hopelessly in the dark about any damage sustained by listed companies.
With the market ready to reopen, the extent of the fallout is still far from clear and analysts say the main question they have is not whether prices will be hurt, but how badly.
"It's clearly going to go down," said Peter Kurtz at investment bank Merrill Lynch in Taipei. "You don't have a 7.6 magnitude earthquake without having some impact in the economy and the stock market."
Experts say many Taiwanese shares are likely to fall by 7 percent on Monday, the maximum one-day drop allowed under local securities regulations.
"We don't expect a disaster. The market will come off initially, but there will be buyers looking for bargains," said Alex Tang, research director at the securities house Core Pacific-Yamaichi in Hong Kong.
"People will redeem investment funds because of a sense of insecurity," said Chris Hsieh, analyst at Nomura Securities. "The market will open down on panic selling, because most people will want cash in their hands rather than in the bank."
Negative market sentiment was fuelled yesterday by Taiwan's Securities and Futures Commission, which said more than 36 percent of all listed companies in Taiwan suffered damage in the earthquake.
If prices go into a free fall, the government could intervene and buy shares with a so-called "stabilization fund," which includes some public pension money, that has been used before to prop up plunging markets.
For now, all eyes are on Taiwan's crucial high-technology sector.
High-tech executives at some companies were only able Thursday to start bringing equipment on-line for testing and recalibration. They hope to bring production gradually back on-line next week.
But the losses could be relatively light. Most chipmakers are located in Hsinchu Science Park, at least 240km from the quake's epicenter.
Taipei's blue chip Weighted Stock Price Index was at 7,972.14 when the quake struck -- up by 19.5 percent on the year.
The Taiwan government says the nation has been losing NT$1.4 billion (US$44 million) a day from its reduced industrial output. But the government estimated the quake will shave no more than 0.2 percentage point off the island's annual economic growth.
The government previously had predicted growth of 5.7 percent this year, but now believes growth might only come to 5.5 percent.
"From the macroeconomics perspective, Taiwan's economy is capable of handling the consequences of the earthquake very well," Chen Po-chih (
Inventories rather than production lines were damaged by the quake, he said, which would allow a quick start-up.
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