(Reuters) - The rupee erased early gains in afternoon trade on Wednesday, dragged back towards the more-than-48 per dollar mark by choppy domestic equities and a euro retreat.
* At 12:56 p.m., the partially convertible rupee was at 47.975/985 to a dollar, near the day's low of 47.99, but still stronger than Tuesday's close of 48.05/06 when it had hit a two-year low of 48.24.
* Traders said rupee could lose more ground as the session progressed if dollar inflows, which helped rupee gain in early trade, weaken.
* The BSE Sensex was down more than 0.4 percent in flip flop trade.
* The euro was at $1.3678 after touching a high of $1.3723 earlier. It had been $1.3682 at the end of the rupee trade on Tuesday.
* The index of the dollar against six major currencies was 77.121 points from 77.105 previously.
* Traders now await the outcome of U.S. Federal Reserve's meeting for cues on global growth and the dollar's direction.
* The Fed is expected to announce a fresh effort at 11:45 p.m (1815 GMT) to invigorate the faltering U.S. recovery by pushing long-term borrowing costs lower through rebalancing of its $2.8 trillion portfolio of bond holdings towards longer-term securities.
(Reporting by Aditya Phatak; Editing by Harish Nambiar)
