Global sell-off continues after Japan blast

Updated: Global stock markets fell sharply on Tuesday as investor panic spreads following a third explosion at Japan's Fukushima nuclear power plant.

The blast sparked fears of nuclear disaster in Japan, with government officials earlier saying radiation from the plant had reached harmful levels.

However, a spokesperson says levels have now fallen after a fire was extinguished at the site, reports the BBC.

Investors across the world dumped stock on Tuesday amid the uncertainty, with Japan's Nikkei 225 Stock Average losing more than 1,000 points, or 10.6%.

In New York, the Dow Jones opened 2.4% lower before recovering slightly and was sitting at 11,775, a drop of 1.8%, shortly into trading.

London's leading index was 3% down at one stage but this afternoon sits 100 points, or 1.7% lower, at 5,676. The losses add to yesterday's 0.9% decline.

Elsewhere in Europe, the French Cac is 3.5% lower at 3,740 while the German Dax has lost more than 300 points, or 4.4%, to drop to 6,548.

It followed a near-11% decline on Japan's Nikkei 225 on Tuesday. The broader Topix index fell 9.5%.

At one point, Nikkei was trading 14% lower, registering its biggest two-day drop in 40 years.

There was a third blast at a nuclear plant in Japan on Tuesday, letting off a radiaoactive cloud that officials confirmed could pose a health risk to the population.

The plant was one of the worst hit following Friday's catastrophic earthquake and tsunami.