ING economist Iris Pang added that with the central bank having done its part to avoid "market chaos" - Shanghai equities have clawed back some of Monday's near-8 per cent rout - government fiscal stimulus is next on the cards.
Beijing extended the usual one-week holiday by three days, but the markets will reopen on Monday and many expect them to fall sharply.
The virus has killed at least 425 people in China, exceeding the 349 death toll caused by the Severe Acute Respiratory Syndrome (SARS) outbreak of 2002-2003, which eventually killed almost 800 globally.
"The Chinese authorities have policy space to respond and have announced a sizeable injection of liquidity, which should help mitigate the costs to economic growth", the World Bank said Monday in a statement.
"Given the high levels of uncertainty, consumers may simply save the spending they had planned for the Lunar New Year holiday, and could spend more cautiously in general", they said.
China's economy grew 6 percent in the fourth quarter, bringing 2019 expansion to 6.1 percent in 2019, the weakest in almost three decades as demand at home and overseas weakened in part due to the bitter Sino-US trade war.
"The coronavirus repercussions on the economy mark the latest in a series of setbacks in the economy over the past year, including a handful of bank failures sparking contagion fears, forcing the central bank to become ever more generous with the provision of liquidity to markets".
With 100 billion yuan worth of 14-day reverse repos maturing on Tuesday, the PBOC will inject a net 400 billion on the day.
Monday being the right time, a massive reverse repo program was announced by the PBOC along with respective cuts in short-term rates.
A woman watches the Shanghai Composite Index on a computer screen in Shanghai.
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Estimates show that past year the Chinese regions hit by the extended shutdown accounted for more than 80% of national GDP, and 90% of exports.
The above comments have little to no impact on the market mood, as a sense of caution prevails, with an increasing coronavirus death toll in China and outside the mainland.
Chinese policymakers are reportedly preparing measures for backing up the country's economy following the coronavirus outbreak, which is expected to negatively impact the first-quarter growth.
Ratings agency S&P has predicted the delay in opening factories could hit vehicle production by up to two percent and warned the real impact may be larger as workers could potentially shun Hubei when called back to work.