By Fayen Wong and Clare Baldwin
SHANGHAI/HONG KONG (Reuters) - Chinese authorities slaughtered over 20,000 birds at a poultry market in Shanghai on Friday as the death toll from a new strain of bird flu mounted to six, spreading concern overseas and sparking a sell-off in airline shares in Europe and Hong Kong.
The local government in Shanghai said the Huhuai market for live birds had been shut down and 20,536 birds had been culled after authorities detected the H7N9 virus from samples of pigeons in the market. Other live poultry markets in the city will be closed down from Saturday, it said.
All the 14 reported infections from the H7N9 bird flu strain have been in eastern China and at least four of the dead are in Shanghai, a city of 23 million people and the showpiece of China's vibrant economy.
The latest death was of a 64-year-old man in Zhejiang province, state news agency Xinhua said on Friday, adding that none of the 55 people who had close contact with him had shown symptoms of infection.
Shanghai authorities stressed the H7N9 virus remained sensitive to the drug Tamiflu and those who were diagnosed early could be cured.
"We currently have enough reserves of Tamiflu to meet with the current outbreak," Wu Fan, director of the Shanghai Center for Disease Control & Prevention, told a news conference.
Tamiflu is made by Roche Holding AG.
Airline shares tumbled in European markets on fears the outbreak could become widespread. The STOXX Europe 600 travel and leisure sector index fell as much as 1.6 percent, the biggest laggard among European sectors.
"The sector is reacting to fears of a new pandemic of bird flu in China, which would hurt air traffic," said a Paris-based airline sector analyst.
In Hong Kong, the overall index closed at a four-month low, led by falls in airline shares over fears of diminished demand for air travel. Air China slumped 9.8 percent, its worst single-day loss in nearly four years.
"The bird flu issue is at the top of people's minds now," said Alfred Chan, chief dealer at Cheer Pearl Investment in Hong Kong.
In Shanghai, the rising death toll prompted some residents to stay away from markets with live chickens and ducks.
"I'm only getting my groceries at the large supermarkets now because I don't think it is safe to visit the wet markets anymore," said 38-year-old Shao Linxia, adding she had also stopped buying poultry since news of the bird flu surfaced.
"We all remember SARS and how quickly it could spread, so we are obviously worried."
SHADOW OF SARS
The 2002-2003 epidemic of Severe Acute Respiratory Syndrome (SARS) started in China and killed about one-tenth of the 8,000 it infected.
Still, there were few signs of panic in Shanghai with shops remaining open and not many people wearing face masks in public.
The strain does not appear to be transmitted from human to human, but Hong Kong authorities said they were taking extra precautions.
Additional staff would be deployed at immigration points to make random temperature checks of visitors in addition to the infrared full-body scanners already in place, Ko Wing-man, Hong Kong's food and health secretary, told reporters.
Vietnam banned imports of Chinese poultry.
In Japan, airports have put up posters at entry points warning all passengers from China to seek medical attention if they have flu-like symptoms.
In the United States, the White House said it was monitoring the situation and the Centers for Disease Control and Prevention said it had started work on a vaccine if it was needed. It would take five to six months to begin commercial production.
With the fear that a SARS-like epidemic could re-emerge, China said it was pulling out the stops to combat the virus.
"(China) will strengthen its leadership in combating the virus ... and coordinate and deploy the entire nation's health system to combat the virus," the Health Ministry said in a statement on its website (www.moh.gov.cn).
China "will continue to openly and transparently maintain communication and information channels with the World Health Organization and relevant countries and regions, and strengthen monitoring and preventative measures", the ministry said.
The virus has been shared with World Health Organization (WHO) collaborating centers in Atlanta, Beijing, London, Melbourne and Tokyo, and these groups are analyzing samples to identify the best candidate to be used for the manufacture of vaccine - if it becomes necessary.
Any decision to mass-produce vaccines against H7N9 flu will not be taken lightly, since it will mean sacrificing production of seasonal shots.
That could mean shortages of vaccine against the normal seasonal flu which, while not serious for most people, still costs thousands of lives.
Sanofi Pasteur, the world's largest flu vaccine manufacturer, said it was in continuous contact with the WHO through the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), but it was too soon to know the significance of the Chinese cases.
Other leading flu vaccine makers include GlaxoSmithKline and Novartis
Preliminary test results suggest the new flu strain responds to treatment with Roche's Tamiflu and GSK's Relenza, according to the WHO.
Other strains of bird flu, such as H5N1, have been circulating for many years and can be transmitted from bird to bird, and bird to human, but not generally from human to human.
So far, this lack of human-to-human transmission also appears to be a feature of the H7N9 strain.
"The gene sequences confirm that this is an avian virus, and that it is a low pathogenic form (meaning it is likely to cause mild disease in birds)," said Wendy Barclay, a flu virologist at Britain's Imperial College London.
"But what the sequences also reveal is that there are some mammalian adapting mutations in some of the genes."
(Additional reporting by Chen Yixin in SHANGHAI, Ben Blanchard in BEIJING, Grace Li in HONG KONG,; Olivier Fabre in TOKYO, Kate Kelland in LONDON and Julie Steenhuysen in CHICAGO; Editing by Raju Gopalakrishnan)