UPD-In a new development, China’s central bank pumped 20.2 bln Euros into the market through ‘reverse repos’ in an attempt to stop the free-fall of shares values.

Nervousness was the prevalent feeling across global stock markets, Tuesday following ‘black Monday’ and the panic caused by massive sell-offs of Chinese shares-US stocks dropped by an unprecedented 1,000 points upon opening, finally closing with 600 points lower.

China stocks opened sharply lower, Tuesday as cautious investors continued dumping stocks. The Shanaghai Composite index traded 5 per cent lower in morning trading, while the smaller Shenzhen Composite lost 6 per cent. In the wider Asia-Pacific region markets were performing better, with Australia’s ASX index and Seoul’s KOPSI Composite all in the positive territory. Japan’s Nikkei opened with losses, before closing with a 1.4 per cent gain.

Meanwhile, crude oil dropped below the 38 US dollar threshold a barrel. Investors continue to seek safe havens, with the Euro and sovereign bonds (especially German) presenting the safest refuge. Analysts estimate intervention by central banks around the world with tools like Quantitative Easing (QE) does not present a remedy to the current economic condition.

Investors agree that under the current circumstances a drastic intervention by the Chinese central bank and auditing authorities could help stem the fall of shares and instil confidence in the second largest economy in the world. Meanwhile, Mohamed El-Erian, top economist at Allianz  warned investors in an interview to CNBC that stock sell-offs will continue and they should expect equities to drop even more until the Chinese authorities adopt measures to stop the flight of capital.