BENGALURU, Sept 2 (Reuters) - Indian shares struggled for direction early on Friday, swinging between gains and losses, as investors awaited a critical U.S. jobs data to get clues on how aggressively will the Federal Reserve raise interest rates.

The NSE Nifty 50 index was down 0.1% at 17,526, by 0510 GMT, while the S&P BSE Sensex fell 0.08% at 58,716.17.

"Markets are technically in an overbought territory. Headlines over China-Taiwan will keep markets under pressure and U.S. jobs data will be crucial to watch out. Overall, markets are under selling pressure," said Prashanth Tapse - research analyst, senior VP (research), Mehta Equities Ltd.

Analysts expect that 285,000 U.S. jobs were added last month, while unemployment hovered at 3.5%. Investors may not like a strong number if it supports the basis for a continuation of aggressive rate hikes by the U.S. central bank.

"Domestically, data remains strong and we will see cooling down in inflation with crude prices below $90 a barrel and that will help markets to be stable," Tapse said.

Despite a volatile week, foreign investor inflows continued in the domestic market. This week saw inflows of $776.86 million as of Thursday, with $534.34 million being pumped in the previous session.

NTPC shares gained as much as 3.55% after a report said Indian government has allowed public sector enterprises to import items for renewable energy projects from countries, including China. (https://bit.ly/3wPgqBG)

Shree Cement fell 2.5% and was the top drag on Nifty 50 after National Stock Exchange (NSE) said the stock will be removed from the blue-chip index, effective close of Sept. 30.

Adani Enterprises rose as much as 1.8% after NSE said conglomerate Adani Group's holding company will be added to the Nifty 50 index, effective Sept. 30.

Meanwhile, Moody's Investors Service on Thursday lowered its 2022 growth forecast for India to 7.7% from 8.3% last year, citing rising interest rates, uneven distribution of monsoons and slowing global growth. (Reporting by Nallur Sethuraman in Bengaluru;Editing by Dhanya Ann Thoppil and Uttaresh.V)