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*TSX down 316.02 points at 12,064.11
*Hits lowest level since August 2010
*Biggest drop since June 2009
*U.S. jobs data stronger than expected
*Magna dives more than 12 percent (Updates to afternoon)
By Claire Sibonney
TORONTO, Aug 5 (Reuters) - Toronto's main stock index plunged nearly 4 percent on Friday to its lowest level since August 2010, dropping below the critical 12,000-point level as a global exodus from risky assets moved into a second day.
The selloff in Toronto was deeper and steadier than that on U.S. stock markets, which swung sharply back and forth during the session.
The volatility reflected frustration with policymakers' inability to resolve the debt crises in Europe and the United States as growth in the world's big economies shows signs of stalling -- despite some positive North American jobs data on Friday. [.N]
U.S. job growth accelerated more than expected in July, while the Canadian unemployment rate fell in July to its lowest level since December 2008. [nN1E77404O] [nOAT004847]
All 10 of the Toronto index's sectors were down heavily as resource shares -- which make up about half of the TSX -- fell sharply.
Among the index's three powerhouse sectors, the energy group dropped 3.4 percent, materials lost 3.1 percent, and financials were down 1.4 percent.
Suncor Energy (SU.TO) was the most influential decliner, slipping 3.8 percent to C$31.86, taking its lead from volatile U.S. crude futures. [O/R]
Fergal Smith, managing market strategist at Action Economics, said the recent break through key technical levels in equity markets -- including the S&P 500 and TSX -- will leave investors on the defensive for some time.
"We're seeing what's been happening in bond markets for weeks now spill over to equity markets," Smith said.
"We had been in a big consolidation pattern, we've broken down out of that, so the incentive is going to be to sell rallies."
At 12:36 p.m. (1636 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE had moved off its lows, but was still down 316.02 points, or 2.55 percent, at 12,064.11.
The action followed a steep 3.4 percent drop on Thursday, the TSX's biggest one-day loss in two years as markets worldwide fell prey to fears about slowing economic growth and the euro zone's debt crisis.
Friday's intraday fall -- at one point more than 3.9 percent to 11,894.7 -- was the biggest since June 2009. It marked the lowest level since August 2010.
"You've got margin selling taking place as well because a lot of people borrow money to buy stocks, and all these broker/dealers are watching what the situation is," said Fred Ketchen, director of equity trading at ScotiaMcLeod, who noted the TSX's declines were deeper than in the United States.
"When you are looking at the Dow Jones you are only talking about 30 stocks, and here you are talking about a whole lot more, close to 300, and that does make a difference."
In individual company news, auto-parts giant Magna International (MG.TO) tumbled more than 12 percent to C$38.65, after posting a a drop in second-quarter profit on a weak performance in Europe and cutting its profit margin outlook. [nN1E7740QO]
Some bright spots were found among gold miners as the price of the price of the precious metal held firm. Goldcorp (G.TO) was up 1.3 percent at C$45.45, and Agnico Eagle (AEM.TO) climbing 1.7 percent to C$55.08.
($1=$0.98 Canadian) (With additional reporting by Trish Nixon; editing by Peter Galloway)