Given a projective symplectic manifold $M$ and a non-singular hypersurface $X subset M$, the symplectic form of $M$ induces a foliation of rank 1 on $X$, called the characteristic foliation. We study the question when the characteristic foliation is algebraic, namely, all the leaves are algebraic curves. Our main result is that the characteristic foliation of $X$ is not algebraic if $X$ is of general type. For the proof, we first establish an etale version of Reeb stability theorem in foliation theory and then combine it with the positivity of the direct image sheaves associated to families of curves.