The head of Canada’s largest pension plan said investors are in danger of overreacting to the potential impact of COVID-19.

“So far, it’s not (had an) unreasonable impact, but I think [the market is] pricing in a very long time before there’s any recovery from this and I think that’s probably a little too pessimistic,” Mark Machin, chief executive officer of the Canada Pension Plan Investment Board, told BNN Bloomberg’s Tara Weber in an interview on Monday.

“Markets could really overreact going forward.”

The crash in worldwide oil prices – fuelled in part by a price war between Russia and Saudi Arabia, as well as fears that COVID-19 would result in a dip in demand – worsened in market action on Monday, taking North America’s major indices along with it.

The S&P 500 fell 7.6 per cent on Monday, suffering its worst daily loss since the global financial crisis in 2008, while the Dow Jones Industrial Average shaved more than 2,000 points off its Friday close for a drop of nearly 7.8 per cent. The U.S. benchmark West Texas Intermediate crude April futures contract fell 25 per cent to US$30.96 on Monday.

Machin said markets are presently awaiting solutions to the virus’ spread from governments worldwide and urged investors to practice patience with their portfolio.

“It’s really the impact of the measures that governments should put in place to slow the spread of the virus. And then the behaviour that individuals are going to take,” Machin said.

“I think people will personally overreact but we need to factor that into what’s going to happen to businesses and the economy.”