European shares held steady above a technical resistance level for the second day on Wednesday in thin volume as investors stayed away after the resumption of talks to stave off a disorderly debt default by Greece.

French bank Societe Generale , a big creditor to Greece, rose 5.3 percent after traders cited a news report that regulators were telling France's main banks to boost Greek debt provisions, which it said was a conservative move by the Bank of France to keep them relatively well capitalised.

Traders said stocks stayed above the technical resistance level of 1,028 -- its October 2011 high from the rally that started in September 2011 -- as investors were taking the view that a deal in the debt talks was more likely than not, given the unconscionable costs of failure.

Analysts have warned that a disorderly default could cause financial havoc and tip the global economy into recession, which would in turn bring a slowdown in company profits.

The markets to some extent are hanging on and would have completely sold off if they thought Greece could not come to an agreement, said Mike Lenhoff, chief strategist and head of research at Brewin Dolphin Securities.

If the Greece talks were fruitful, it would mean stability for the financial sector, borrowing costs will decrease. But if they are not, it will just lead to contagion.

The pan-European FTSEurofirst 300 <.FTEU3> index of top shares closed up 0.02 percent at 1,034.64 points after being as low as 1,025.15 and as high as 1,037.77 in volume 83.4 percent of its 90-day daily average.

The index also remained above its 200-day moving average, a momentum indicator that defines possible support and resistance areas.

But Lenhoff said he would need to see the index break above the next resistance level to consider changing weightings, which included underweight positions in financials and cyclicals.

The next level is seen around 1,062 points -- its 61.8 percent Fibonacci Retracement from its February 2011 to September sell-off.

To confirm that Tuesday's move was something more significant than a 'bull trap', the index must confirm the break with further upside, preferably with a close above 1,040 that would clear the way for a run-up to around 1,072, said Bill McNamara, technical analyst at Charles Stanley.

Trade was choppy, with stocks getting a mid-morning lift after reports indicated that the IMF was proposing to boost its lending resources by $1 trillion, easing worries about funding in the euro zone and slowing company growth.

European stocks quickly fell into negative territory after IMF sources later said it was estimating it needed to raise up to $600 billion to lend to struggling countries in the euro zone debt crisis.

In a thin market, however, there was heavy selling in Tullow Oil , down 4.2 percent, after a trading update showed production was declining for the oil explorer and net asset values (NAV) were likely to fall as a result.

Volume was strong for the oil explorer at more than double its 90-day daily average.

(Reporting by Joanne Frearson; Editing by Will Waterman)