Sluggish data from Germany added to concerns about the global economic recovery that had been triggered earlier this week by a bearish global growth forecast from the International Monetary Fund.

Investors have of late become increasingly concerned about the European economy, with figures from Germany indicating that growth there has been faltering.

Weakness in shares of energy producers, reflecting sluggish oil prices, had the biggest negative influence on the index.

The Toronto stock market's benchmark TSX is down nearly 8 percent since hitting a record high last month.

“It looks like the selloff has taken a life of its own,” said Elvis Picardo, strategist at Global Securities in Vancouver, who said investors were worried about a potential slowdown in global growth.

“We haven't seen the r-word creep into the conversation yet, but we've seen a distinct economic stall in Japan, Germany and even Canada," he added, referring to the word "recession".

The Toronto Stock Exchange's S&P/TSX composite index <.GSPTSE> closed down 205.87 points, or 1.40 percent, at 14,460.60. Nine of the 10 main sectors on the index were in the red.

Shares of energy producers fell 2.8 percent, mirroring a 3 percent drop in the price of U.S. crude oil. Canadian Natural Resources Ltd (>> Canadian Natural Resources Limited) dropped 1.8 percent to C$39.06, and Suncor Energy Inc (>> Suncor Energy Inc.) lost 1.9 percent to C$37.51.

Financials, the index's most heavily weighted sector, were down 0.4 percent. Bank of Nova Scotia (>> The Bank of Nova Scotia) slipped 0.2 percent to C$69.02.

In corporate news, Canadian Tire Corp (>> Canadian Tire Corporation Limited) said it will target average earnings per share growth of 8-10 percent between 2015 and 2017 under an "aggressive plan to compete". The stock jumped 3.1 percent to C$120.67.

Ithaca Energy Inc tumbled 9.9 percent to C$1.73 after the company said it lowered its pro-forma production outlook for 2014.

Shares of diversified miner Teck Resources Ltd (>> Teck Resources Ltd) dropped to a five-year low after China, the world's top coal importer, said it will levy import tariffs on coal.

(Editing by Matthew Lewis; and Peter Galloway)

By John Tilak