At the close, the benchmark S&P/ASX 200 was down 88.5 points at 4,186.9.

"Almost all sectors are weaker, with a broad sell-off across the resources," said IG Markets analyst Stan Shamu.

"Today the market seems to be paying the price for its recent exuberance -- some would say over-exuberance."

The move lower came after Germany cast doubt on a plan to fix the eurozone's debt crisis and China said its economy grew 9.1 percent year-on-year in the third quarter - slightly lower than forecasts.

The commodities-linked Australian dollar was also weaker at 102.01 US cents late in the session, from 103.07 cents on Monday.