On a day when just nine players fired under-par rounds in New Delhi, Wallace's two-under effort moved him to seven under and a position to continue his rapid rise through the ranks.
The Englishman won six times on the Alps Tour in 2016 -- including five in as many starts -- to earn a place on the Challenge Tour and wasted no time in winning the Open de Portugal to gain his European Tour card.
"I'm very happy," he told europeantour.com. "There are some brilliant players up there.
"You know there is going to be a charge tomorrow and someone is going to play well. I just have to go out there and try to execute like I did today and see how it goes.
"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."
After three birdies and a bogey in his first five holes on Saturday, he led for the first time when he drove the ninth green with an iron and holed a tricky double-breaker for an eagle.
He made three bogeys to a single birdie on the way home but that was good enough to leave him alongside Sharma in top spot.
The Indian has already won twice this season to lead the Race to Dubai and held the 54-hole lead at last week's WGC-Mexico Championship as his stock conitnues to rise.
The 21-year-old had made four birdies and three bogeys before dropping two shots on the 17th, but a birdie on the last put him back in the lead.
"I'm just looking forward to playing out there again," he said. "I just want to have fun.
"It's the second week in the 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.
Scotland's Stephen Gallacher produced the lowest round of the day with a 67 to sit a shot off the lead as the 2014 Ryder Cup winner looks for a first individual victory in four years.