* Chinese regulators restrict share sales by some fund managers
* Regulators take a series of measures to limit market fall
* China stocks tumble after market reopens (Adds more details, comments)
By Zhang Yan and Ryan Woo
BEIJING/SHANGHAI, Feb 3 (Reuters) - China's securities regulator has urged some mutual fund managers not to sell shares unless they face investor redemptions, four sources told Reuters, as the country's stock markets plunged on Monday amid a growing virus outbreak.
The China Securities Regulatory Commission (CSRC) is giving verbal instructions to major mutual fund companies, asking them not to offload their stock holdings on Monday unless necessary, according to the fund sources with direct knowledge of the so-called window guidance. Selling in the following days should also be restrained, two sources said.
Despite the sales restrictions - issued by CSRC on Sunday evening according to one source - the market still plunged.
Chinese stocks tumbled more than 8% on Monday morning as mainland markets reopened following a 10-day break, giving investors the first chance to react to the rapidly-spreading coronavirus. The death toll from the epidemic has risen to 361 in China.
"Potential massive investor redemption is a big concern," said one fund executive. "If that happens, mutual fund managers have no choice but sell."
Chinese regulators had taken other measures to limit the virus' damage to the country's financial markets.
Over the weekend, CSRC issued a verbal directive to brokerages including Citic Securities Co and China International Capital Corp, seeking to limit short-selling activities by their clients on Monday.
In addition, the central bank injected 1.2 trillion yuan ($174 billion) worth of liquidity into the banking system on Monday via open market operations to calm market anxiety.
CSRC's latest window guidance - verbal instructions from regulators to mainly Chinese companies - risk inviting fresh criticism from foreign investors who have complained about a lack of transparency and an uneven playing field in China.
Regulators have been more careful with such measures to stabilise the markets, especially after MSCI added Chinese shares into its emerging markets index, another fund manager said. (Additional reporting by Samuel Shen in Shanghai; Editing by Jacqueline Wong)