The World Health Organisation said on Monday there is no evidence China's new H7N9 strain of bird flu is spreading between humans, as the death toll rose to seven and airline and tourism shares slumped.
China said just over a week ago that H7N9 avian influenza had been found in humans for the first time. Shanghai announced a new fatality on Monday, a man aged 64 who died the previous day, while the number of confirmed cases climbed to 24.
Like the more common H5N1 variant which typically spreads from birds to humans, experts fear the prospect of such viruses mutating into a form easily transmissible between humans, with the potential to trigger a pandemic.
"Although we do not know the source of infection, at this time there is no evidence of sustained human-to-human transmission," Michael O'Leary, the WHO's representative in China, told a news conference in Beijing.
"The human cases we know of are very serious. A large proportion have died," he added.
Fears over the deaths sparked a fall in Shanghai shares, with hotel and tourism shares leading the decline.
China United Travel, a tourism agency based in the eastern city of Nanjing, slumped 3.38% and hotel operator Shanghai Jinjiang International Hotels Development fell 5.21 percent, while flag carrier Air China was off 3.38% and China Eastern Airlines down 3.23 percent. But medical stocks rose.
Concerns over the outbreak were also blamed for a tumble in Hong Kong stocks on Friday, although shares recovered on Monday.
"The major cause of bird flu remains unknown and this will cause panic among people and affect consumption, which may affect market expectations for the trend of the domestic economy," said BOC International analyst Shen Jun.
The outbreak has so far been confined to China's developed eastern region, with five deaths in the commercial hub Shanghai and two in the neighbouring province of Zhejiang.
Infections have also occurred in Jiangsu and Anhui provinces.
A Chinese expert said more H7N9 cases could be found in a wider area.
"We are tracking the source and cannot rule out the possibility of finding the virus in other regions," said Feng Zijian, director of the emergency office for China's disease control centre.
Taiwan, which on Sunday announced it was testing two possible cases, said they had had not contracted H7N9.
Another Chinese health official, Shu Yuelong, said poultry infected with the H7N9 strain die more slowly than those with H5N1, giving the virus more time in which to infect people.
More than 365 people have died of H5N1 worldwide since a major outbreak in 2003, and it kills about 60% of people who develop it, according to WHO statistics.
The first deaths from H7N9 were not reported by Chinese authorities until three weeks after they occurred, prompting criticism the initial announcement was too slow.
But Chinese officials have said the delay in announcing the first results was because it took time to determine the cause of the illness. O'Leary praised China's transparency, saying the WHO was "very satisfied and pleased with the level of information shared".
China faced condemnation a decade ago on accusations it covered up the 2003 outbreak of Severe Acute Respiratory Syndrome, which eventually killed about 800 people globally.
Users of China's popular weibo microblogs have expressed scepticism about official assurances. "Although there is no human transmission, why does the number (of cases) increase daily? This makes people scared," said user Li Xiao Lei.
The WHO said in a statement that it is possible the virus can spread to humans from animals, such as pigeons.
Shanghai has culled more than 111,000 birds, banned trading in live poultry and shut markets in a bid to curb the outbreak.
Nanjing city followed suit by banning live poultry trading while Hangzhou culled poultry after discovering infected quail.
The China Daily newspaper on Monday called for "high alert" nationwide and urged stronger regulation of the poultry trade.
"The rules for transporting and trading of live poultry in cities should be strengthened, because the bird flu can spread very fast in densely populated cities," it said in an editorial.