A week after the nation was first reported to be suffering from what could be a pandemic, China's stocks have been hit, slumping 10 per cent versus the high posted in February, as the number of infected rose to 21 on Sunday.

Most affected were property-related stocks as well as shares of Chinese airline companies.

"There are worries about the bird flu that haven't been reflected in the markets because we were closed for the holidays," analyst Mao Sheng was quoted by Bloomberg. "There may be some bargain hunting along the way but there's no real big driver to push stocks much higher in the near term."

On Sunday, China confirmed the addition of three new bird flu cases, which have now brought the total number of infected to 21. The death tally remained at six.

The same day, China stepped up efforts to curb the rising anxiety of yet another potential bird flu pandemic, this time courtesy of new avian influenza A (H7N9).

Schools around the country have been directed to ensure the safety of the food their respective students are eating, including strictly monitoring if any of the children report feeling sick. School workers disinfected classrooms.

Markets have banned live poultry trading as well as culled poultry after discovering infected quail.

However, authorities remained adamant there is still no conclusive evidence to show the human-to-human transmission of the virus.

"Currently, there is still no evidence showing the H7N9 bird flu virus is transmitted between people," Wu Fan, a Shanghai health official, was quoted by the AFP as saying to an online chat on Sunday.

But analysts remain fearful as the current bird flu wave will hurt China's stock performance.

"Bird flu will weaken demand in the economy and adds to the bearishness in Chinese stocks," John-Paul Smith from Deutsche Bank AG told Bloomberg. "The sentiment has turned for the worse over the past month. Going forward, a lot of industrial companies will face considerable difficulties."