European shares inched higher on Wednesday in a choppy session as better-than-expected U.S. data and forecast beating results just about offset diminishing expectations for an EU debt-crisis summit.

Better-than-expected earnings news boosted firms including Norwegian telecoms group Telenor and German drugs and chemicals group Merck , up 8.5 percent and 5.3 percent respectively.

The pan-European FTSEurofirst 300 <.FTEU3> index of top shares provisionally closed up 0.1 percent at 983.16 points, but retraced much of the day's gains over worries about the EU summit, with disagreements remaining over key issues.

Behind all this is the prospect of a financial crisis, Mike Lenhoff, chief strategist at Brewin Dolphin, said. The market wants some indication there is an agreement in the haircut for bondholders, as well as the rescue fund.

Lenhoff added the market could give up recent gains if policymakers failed to grasp the severity of the situation, although, on the flip-side, solid agreement on the key issues could help the market add a further 10 percent by year-end.

(Reporting by Joanne Frearson)