The Taliban claimed responsibility for Monday's attack in Spin Boldak in Kandahar province near the Pakistani border, reported the Associated Press.
Three Canadian soldiers, part of the NATO security force in Afghanistan, were among those wounded, but civilians at the marketplace bore the brunt of the attack, said Kandahar Gov. Asadullah Khalid.
"We strongly condemn this cowardly attack on the civilian population, who were attacked by insurgents during the course of their daily business," said Squadron Leader Peter Darling, a spokesman for NATO's International Security Assistance Force in southern Afghanistan, according to the AP.
Also Monday, Afghans buried relatives and friends who died in Sunday's attack during a dog fighting competition. A suicide bomber blew himself up in a crowd of several hundred people who were watching the event on the western edge of the southern city of Kandahar.
Officials said the attacker was targeting an anti-Taliban militia leader, Abdul Hakim Jan, who died along with 35 of his men, the AP reported.
The death toll reportedly rose to more than 100, making it the deadliest bombing in Afghanistan since the fall of the Taliban in 2001.
The blast destroyed several Afghan police trucks and left blood stains around the dirt field. Dog fights were banned during Taliban rule.
Jan, a provincial police chief in Kandahar in the early 1990s, was most recently appointed the commander of an auxiliary police force tasked with protecting the Arghandab, an area north of Kandahar.
The Taliban briefly overran the area late last year after the local leader, Mullah Naqibullah, died of a heart attack, according to the AP.