* Trade choppy after Tuesday's biggest 1-day fall in 18 mths
* Rupee seen in 46.80-47.30/dollar range for day - trader (Updates to mid-morning)
June 2 (Reuters) - The Indian rupee erased early gains and eased on Wednesday as the euro's losses against major currencies overshadowed a steadier stock market.
At 10:42 a.m. (0512 GMT), the partially convertible rupee INR=IN was at 47.21/22 per dollar after strengthening to 46.94 early. On Tuesday, it had dropped 1.7 percent to 47.16/17 in its biggest one-day fall since a 2.6 percent drop on Nov. 12, 2008, according to Thomson Reuters data.
"The rupee is expected to be very choppy today. The early rise was due to a firm stock market but euro's fall is weighing," a senior dealer with a foreign bank said predicting a range of 46.80-47.30 during the session.
Indian shares rose 0.6 percent in opening deals tracking steadier Asian markets, but then turned briefly negative. [.BO]
Foreign fund flows into and out of the domestic sharemarket are a decisive factor for the rupee's moves. In May, the rupee fell 4.3 percent as foreigners pulled out $2 billion from stocks.
The euro was treading water but it looked increasingly vulnerable to another sell-off amid mounting concern that the euro zone's debt crisis is spreading to its banking system.
The dollar held firm near a 15-month high against a basket of currencies as market players shifted their focus to reports on the U.S. labour markets due later this week, which are expected to show a surge in employment and a slight fall in unemployment. [ID:nN01175887] [USD/]
One-month offshore non-deliverable forward contracts PNDF were quoted at 47.50, weaker than the onshore spot rate.
In the currency futures market INRFUTURES, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both at 47.3750, with the total traded volume on the two exchanges at about $1.8 billion. (Reporting by Swati Bhat; Editing by Ranjit Gangadharan)
