BENGALURU, Jan 20 (Reuters) - Indian shares struggled for direction on Friday, as a rise in financials ahead of key earnings offset weakness in sentiment on rate hike fears.

The Nifty 50 index was up 0.04% at 18,115.65 as of 11:08 a.m. IST, while the S&P BSE Sensex added 0.08% to 60,909.33. Both the benchmarks had fallen 0.2% earlier in the session.

"The hawkish comments from the global central bank officials are certainly not helping the momentum in our equities and only exacerbate growth worries," Avinash Gorakshakar, head of research at Profitmart Securities, said, adding that the volatility in Indian markets is also due to "lacklustre" earnings in sectors other than financials.

Hindustan Unilever was the top loser in the Nifty 50 index, declining over 4% after the company said it would pay higher royalty fees to parent Unilever. Its net profit beat estimates in the third quarter.

The stock, which has the second-highest weightage among shares of fast-moving consumer goods, dragged the FMCG index down 1%.

The losses in the FMCG index were offset by gains in financials that were up 0.6% ahead of key earnings from private lenders ICICI Bank and Kotak Mahindra Bank due on Saturday.

The expectations of strong third-quarter performance from the private lenders buoyed financial stocks, three analysts said.

Reliance Industries, India's top firm by revenue and the stock with the highest weightage in Nifty 50, fell 0.5% ahead of its earnings due post market hours on Friday.

Wall Street equities declined overnight on Thursday with data indicating a strong labour market dashed expectations of a pause in the fastest rate hiking cycle in the U.S. since the 1980s.

European equities also fell, posting their worst trading day in 2023 so far after the president of the European Central Bank, Christine Lagarde, underscored the bank's determination to tackle the rise in inflation through rate hikes.

($1 = 81.4400 Indian rupees) (Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman and Dhanya Ann Thoppil)