Overnight leader Emiliano Grillo signed for a disheartening 78, Scotland’s Marc Warren freefalling down the leaderboard with an 86 to drop from a share of ninth to T57.
Grillo made back to back double bogeys at the 13th and 14th holes, both after finding the fairway from the tee, but his 6-over day still sees him just two shots off the pace and sharing fourth.
Wallace and Sharma are at 7-under, one ahead of Scotland’s Stephen Gallacher who had the round of the day with a 5-under 67.
Grillo is alongside Andrew ‘Beef’ Johnston and Austria’s Matthias Schwab at 5-under, Pablo Larrazabal and American Sihwan Kim at 4-under.
Just 18 players remain in red figures at the controversial Gary Player designed course in New Delhi where just seven players finished under par for the 72 holes last year.
Sharma, who shot to prominence when he led last week’s WGC Mexico event through 54 holes, will have the support of the crowd at his home course as he takes aim at a third European Tour title for the season.
"I’m just looking forward to playing out there again," he said after an even par 72.
"I just want to have fun. It’s the second week in a row I’m in the leading group. I’m going to draw from my experiences last week.
“I know it’s going to be a battle out there tomorrow and I’ll be ready for it.”
Co-leader Wallace, whose second straight 70 included and eagle at the par-4 9th, is expecting another difficult day Sunday but relishes the challenge.
"It’s such a hard golf course that you have got to play well,” he said. “I’ll try to get a good night of sleep tonight and go from there.
"Every hole is a test. Every hole is a double bogey waiting to happen. I just took every hole as it came and played it as well as possible.
“That eagle on nine was probably the highlight of my week – and year – so far."
Wade Ormsby is the best of the Australians at 5-over and T37, one ahead of Jason Scrivener and David Gleeson who are T42.
Terry Pilkadaris, who had three holes of his second round to complete Saturday morning after play was suspended late Friday, missed the cut by one.
SIGNATURE HOLES - 5TH AT SOUTHERN GC VICTORIA:
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