Growth in China's services sector slowed sharply in July to a near nine-year low, a survey indicated.

Also dragging on the market was a comment by Polish foreign minister Radoslaw Sikorski, who said Russia has gathered military forces on its border with Ukraine to either pressure Ukraine or to enter it.

The Toronto stock market's resource-sensitive benchmark index, which shed 1.6 percent last week, extended the slide on Tuesday as resource shares dropped as the prices of commodities such as copper and oil traded lower. The market was closed Monday for a holiday.

“Investors will be very well served to be prepared for a correction even if this (selloff) doesn't materialize into something more severe," said Craig Fehr, Canadian market strategist at Edward Jones in St. Louis, Missouri.

“When you couple some of the prevailing risks that exist out there with the exceptional gains we've seen in the stock market, that is exacerbating some of the concerns that we have at the moment,” he added.

The Toronto Stock Exchange's S&P/TSX composite index <.GSPTSE> closed down 27.55 points, or 0.18 percent, at 15,187.71. Five of the 10 main sectors on the index were in the red.

Financials, the index's most heavily weighted sector, declined. In the group, Bank of Nova Scotia (>> The Bank of Nova Scotia) lost 0.2 percent to C$73.32, and Toronto-Dominion Bank (>> Toronto-Dominion Bank) fell 0.5 percent to C$56.24.

Shares of energy producers followed oil prices lower, with Suncor Energy Inc (>> Suncor Energy Inc.) slipping 0.6 percent to C$43.19 and Encana Corp (>> Encana Corporation) losing 0.6 percent to C$22.92.

Recent acquisitions helped Saputo Inc (>> Saputo Inc.) post a higher quarterly profit. Shares of the dairy producer climbed 2 percent to C$68.95.

A large pond holding waste matter at an Imperial Metals Corp (>> Imperial Metals Corporation) gold and copper mine in central British Columbia spilled gray sludge into waterways. Shares of the miner dived 40.6 percent to C$9.98.

(Editing by Peter Galloway)

By John Tilak