European and Asian tobacco companies extended declines Monday amid investors concern that a move by the U.S. Food & Drug Administration to cut the level of nicotine to "non-addictive" levels could slash sales in the $26 billion cigarette market.

Imperial Brands plc (IMBBY) shares were marked 4% lower in the opening 30 minutes of trading in London, taking their two-day decline past 7.6% and putting them within touching distance of a two-year low. British American Tobacco plc (BTI) - Get Report shares were marked 1.9% lower at 4,857 pence each after plunging more than 6.8% in Friday trading - the biggest single-day decline in nine years. Japan Tobacco Inc. (JAPAY) shares fell 1.57% in Tokyo trading Monday to close at 3,834 each.

The FDA said Friday that it would study the "potential to render cigarettes minimally addictive or non-addictive" by reducing nicotine levels to "near zero".

"Nicotine itself is not responsible for the cancer, the lung disease and heart disease that kill hundreds of thousands of Americans each year," said newly-confirmed FDA Commissioner Scott Gottlieb. "It's the other chemical compounds in tobacco and in the smoke created by setting tobacco on fire that directly cause illness and death."

The decision hived nearly $30 billion in value from the world's biggest tobacco companies and sent shares in Altria Group Inc. (MO) - Get Report , the maker of Marlboro cigarettes, down 9.5% in their biggest single-day decline since 2008.

British American Tobacco, which recently completed its £41.7 billion ($54.7 billion) of Reynolds American Inc., saw cigarette volumes in its Americas business fall 5.4% to 53 billion, the company said Friday, although profits rose 12.2% to £616 million.

BAT is "the largest vapour company in the world and the successful completion of the Reynolds acquisition bolsters our leading position in both NGPs and combustibles," said chairman Richard Burrows. "We remain confident of delivering another year of good earnings growth at constant rates of exchange."

Watch More with TheStreet: