European shares steady as technical traders bet on new bounce

* FTSEurofirst 300 up 0.1 pct, Euro STOXX 50 up 0.3 pct

* Technical traders step in as charts show rally is intact

* Smiths Group up 1 pct after update shows growth

By Francesco Canepa

LONDON, May 24 (Reuters) - European shares steadied on Friday, staging a small technical bounce after their biggest one-day fall in nearly a year and helped by some signs of renewed monetary support from the United States.

The pan-European FTSEurofirst 300 index was up 0.1 percent at 1,231.84 points while the euro zone blue-chip Euro STOXX 50 was up 0.3 percent at 2,783.70 at 0736 GMT.

Both indexes had closed 2.1 percent lower on Thursday, spooked by speculation the Federal Reserve might start rolling back its hefty asset-purchase programme, which had helped the Euro STOXX 50 rally 11.5 percent in just over a month.

But the Euro STOXX 50 bounced off a technical support in the 2,750 area, corresponding to its March high, on Thursday, leading traders to bet there was still buying momentum and the recent uptrend could resume.

"The drop yesterday was a bit scary," said Valerie Gastaldy, head of technical analysis firm Day-By-Day. "But my advice to clients is that we shouldn't panic and we should try to buy."

The bounce was also underpinned by comments by St. Louis Fed President James Bullard, who said on Friday U.S. inflation would have to pick up before he voted to scale back monetary stimulus and that this was unlikely to happen in the coming month.

"I think he's being sensible," Andy Ash, head of sales trading at Monument Securities, said. "He is one of the three inner sanctum, but is the doves' dove, so nothing unexpected."

Ash said the significance of any move on Friday was limited, with many traders already away ahead of a long weekend in Britain and the United States. He expected the selloff to resume next week.

On a quiet day on the earnings front, Smiths Group rose 1 percent to 1,342 pence after reporting growth in sales and operating profit in the nine months to May 4, leading invest to raise its target for the engineering company to 1,500 pence.