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Big But Harmless Taiwan Quake Shakes Markets



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By Jeffrey Parker
Reuters
Tuesday, November 2, 1999; 7:06 a.m. EST

TAIPEI—A strong offshore tremor rattled Taiwan early Tuesday, sending anxiety rippling through global technology markets despite causing virtually no damage or injury.

Some of the millions of people awakened by the 1:53 a.m. quake scurried out of their homes for fear of a repeat of September's mammoth quake, which killed 2,400 people six weeks earlier to the hour.

But most simply went back to sleep after seeing little amiss.

Though the quake registered a powerful 6.9 on the Richter scale, it measured no more than five on Taiwan proper, causing only brief power outages in eastern Hualien city, nearest its Pacific Ocean epicenter.

Yet daybreak brought an unexpected surprise as Taiwan learnt that word of its major quake had rattled U.S. technology stocks.

As Taiwan makes a large chunk of the world's made-to-order "foundry" microchips, The Philadelphia Semiconductor Index, a major barometer of microchip stocks, tumbled on the news, though it recovered enough to end down just 0.06 percent.

Investors dumped shares of global computer giants that rely on Taiwan exporters for crucial microchips, components and even millions of completed personal and notebook computers.

Taiwan's killer September 21 quake cut power to high-tech factories for several days, causing supply disruptions that played havoc with global computer distribution.

TRAPPED IN ELEVATORS

Tuesday's quake had nowhere near that kind of impact, causing only short-lived power outages in Hualien that trapped people briefly in elevators.

The opening of Taiwan's own stock market brought yet another round of stock selling, as local investors rattled by the impact of the quake on overseas markets lost faith in their own.

"I would say the market over-reacted, since the quake caused no damage, but investors simply prefer to step to the sidelines for fear that more earthquakes may occur," said Hotung Securities research vice president Albert Lin.

Taiwan's benchmark stock index fell 93.30 points or 1.19 percent to 7,721.59.

State seismologists placed the quake's epicenter in the Pacific 28 miles northeast of Taiwan, where it triggered some minor tsunamis, or tidal waves.

The U.S. Earthquake Information Center in Golden, Colorado, estimated the quake's strength at 6.1.

The tremor nonetheless was felt across Taiwan, pushing the Richter needle to three in the capital Taipei, where it awakened the city with a sustained 50-second shaking that set off car alarms.

One man who fled into the presumed safety of the streets said he had good cause—having recently moved from central Nantou county, which bore the brunt of September's quake.

"I would rather stay on the street to wait and see," said Chien Ting-kuang, a taxicab driver. "Memories of the terrifying September quake are still fresh."

The September quake, measured variously at 7.3 and 7.6 on the Richter scale, toppled 52,000 buildings, left perhaps 100,000 people homeless and caused damage and industrial losses estimated at US$14 billion.

On October 22, a quake registering 6.2 hammered the south-central city of Chiayi, injuring 126 people and collapsing a dozen buildings.


© 1999 Reuters

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