Kapur, who shot 66 and was one shot off the lead in the first round, struggled through an outward 40 that included three bogeys and one double bogey in four holes from sixth to the ninth but he fought back with three birdies and no bogeys on the back nine.
On a day where gusty conditions proved to be the key challenge for the field, Kapur, despite the slip was still at five-under and in Tied-eighth place, but six shots of the lead, shared by Peter Uihlein (68) and Brett Rumford (65). One shot behind the leaders is former Open winner, Louis Oosthuizen (64).
The other Indians, SSP Chawrasia (71-75), Arjun Atwal (73-73) and Jeev Milkha Singh (77-84) missed the cut, which fell at even par 144.
Although Kapur was feeling the effects of a shoulder injury but he was quick to rule that out for his erratic form at the Lake Karrinyup Country Club. "No, it's not the shoulder. That would be making an excuse. My shoulder was a lot worse yesterday, but much better today.
Kapur said, "It was not great. I started off pretty steady and gave myself a lot of chances. But I let it slip towards the end of the front nine, which is quite disappointing. I hit two bad shots, made a double and (then) two bogeys in a hurry.
"When I made the turn, I said, you still can fight back. I felt I was playing good and I knew I could bounce back. It's nice to fight back and have a little bit of a better taste in my mouth and not a bitter one as I was walking off the ninth green," said the Indian.
Major winner Oosthuizen had the chance to snatch a share of the lead but his birdie effort on the last sailed just short of the hole. Singapore's Mardan Mamat (69) emerged as the leading Asian Tour player at 7th spot.
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