* TSX falls 2.4 percent to 10,809.45
* Resources key decliners, telecoms lone group to shine
* August GDP down, doubts rise about growth forecasts (Adds details, updates prices)
By Ka Yan Ng
TORONTO, Oct 30 (Reuters) - Toronto's main stock index fell hard on Friday afternoon, unwinding all of the previous session's gains, as its two big resource-based sectors bore the brunt of the sharp decline.
Declines were heavy in Suncor Energy (SU.TO), Barrick Gold (ABX.TO) and other commodity-based issues, which account for more than 40 percent of the index's weighting. The fall was induced by softening prices for oil and gold.
Suncor led all influential decliners, dropping 4.6 percent to C$35.28, while Encana Corp (ECA.TO) shed 3.96 percent to C$59.41. Barrick tumbled 4.3 percent to C$37.95.
Gold prices fell below $1,040 an ounce as the greenback edged higher. Oil eased further below $80 a barrel following a 3 percent jump the previous day.
The U.S. dollar recovered after steep losses in the previous session as stocks failed to build on big gains following Thursday's data showing the U.S. economy grew in the third quarter. [GOL/] [O/R] [FRX/]
"The strength in the U.S. dollar has got everyone discombobulated. The commodities are softening and so people are getting out of commodities, both in oils and golds, and other metals," said Sal Masionis, a stockbroker at Brant Securities.
Overall, the oil and gas sector dropped 3.3 percent and the materials group sagged 4.2 percent.
At 1:05 p.m. (1705 GMT), the S&P/TSX composite index .GSPTSE was down 265.77 points, or 2.4 percent, at 10,809.45. At one point, the index fell as low as 10,790.59, handing back all of Thursday's gains.
Royal Bank of Canada (RY.TO) and other heavyweight banks also handed back some of the meaty gains they made during the index's 269-point rally on Thursday. Royal was down 2 percent at C$54.30.
Also dampening the market's mood, a report on Friday showed Canadian gross domestic product unexpectedly shrank by 0.1 percent in August from July, casting serious doubt on the Bank of Canada's forecast for economic growth in the third quarter. [ID:nN30410008]
The telecoms group was the sole bright spot among the TSX's 10 main groups, rising 1.3 percent, led by Rogers Communications (RCIb.TO), which jumped 3.7 percent to C$32.11.
Entering the session, the TSX was down 2.8 percent for the month of October from September as the market has been hit by a recent string of triple-digit losses. (Editing by Rob Wilson)