Indian shares in narrow band as investors dither

* Shares fluctuate in narrow band

* Technology shares slip on worries over U.S. market

* HDFC, Reliance Inds trade positive (Updates to mid-morning)

MUMBAI, July 3 (Reuters) - Indian shares fluctuated in a narrow band early on Friday, with investors not taking significant positions ahead of the federal budget next week and weak Asian cues dampening sentiment.

Traders booked profits in key gainers from the previous session, such as Oil and Natural Gas Corp (ONGC.BO) and Tata Steel (TISC.BO), while technology stocks were under pressure on worries over the economic turnaround in key markets.

The market could take some trading direction in the second half of the session, after the railway budget is presented in parliament, but the overall mood is likely to be cautious, traders said.

"We won't see much movement because people don't want to take positions, either way. We will see volatility, but by end-of-day, it is likely to be flat," said Ambareesh Baliga, vice president at Karvy Stock Broking.

By 10.55 a.m. (0525 GMT), the 30-share BSE index .BSESN was up 0.15 percent at 14,680.51 points, with 13 components declining. It had slipped as much as 1.1 percent at one point.

Technology stocks dropped on worries about the condition of their key U.S. market, after government data showed the U.S. economy shed more jobs than expected in June, dampening the outlook for an economic turnaround.

Top outsourcer Tata Consultancy Services (TCS.BO) slipped 0.6 percent to 388 rupees, Infosys (INFY.BO), which reports quarterly results next week, fell 1.8 percent to 1,764.50 rupees, while Wipro (WIPR.BO) lost 0.5 percent at 379 rupees.

ONGC, which rose 7 percent on Thursday after the government unexpectedly raised auto fuel prices, helping ease its subsidy burden, was down 1.7 percent at 1,107 rupees.

Tata Steel, which jumped 6.4 percent on Thursday after news of its plans to sell global depositary receipts, fell 0.5 percent to 417.20 rupees.

Overnight, U.S. stocks fell more than 2 percent on worse-than-expected jobs data, which also dragged down Asian stocks, although the drop was limited.

Among key gainers, Housing Development Finance Corp (HDFC.BO) rose 2.1 percent to 2,452 rupees on hopes of higher tax breaks in the federal budget, that could boost mortgage demand. The largest listed company, Reliance Industries (RELI.BO), was up 0.4 percent to 2,016 rupees after falling more than 2 percent on Thursday.

"The market is only likely to get direction after the Budget on Monday," said S.P. Tulsian, an independent investment analyst.

In the broader market, 1,001 decliners outpaced 956 advancers on low volume of 78 million shares.

The 50-share NSE Index was up 0.2 percent at 4,357.10 points.