UPDATE 2-European stocks pare losses as upbeat data lifts mood

* Euro zone business growth soared in May -PMI

* U.S. private payrolls increased by 978,000 in May

* Rating action, ex-dividend weighs on UK

* Remy Cointreau slips from record high
(Adds comments, updates prices throughout)

By Sruthi Shankar and Shreyashi Sanyal

June 3 (Reuters) - European stocks pared losses on Thursday
as upbeat eurozone business growth data and strong U.S. jobs
data lifted sentiment on a dull day of trading, while rating
actions and ex-dividend trading knocked UK shares lower.

The pan-European STOXX 600 index was down 0.1%
after falling as much as 0.8% earlier in the session. The
automobiles & auto parts and healthcare sectors
gained, while miners fell the most.

A host of British companies, including National Grid
and Kingfisher, traded without entitlement for dividend,
pulling UK's FTSE 100 0.6% lower.

After a record expansion in euro zone factory activity, IHS
Markit's final reading showed the bloc's dominant service sector
sprang back into life last month as restrictions eased.

An index covering the service industry soared to a near
three-year high of 55.2 from 50.5, just beating the 55.1 flash
estimate.

"The PMIs are consistent with the euro-zone's economic
recovery gathering pace in May," said Jack Allen-Reynolds,
senior Europe economist at Capital Economics.

"Price pressures in the manufacturing sector are
intensifying, but we still think that higher inflation will be
temporary."

ADP national employment data showed U.S. private payrolls
increased by 978,000 in May, far more than expected, setting an
upbeat tone for the closely watched official jobs report on
Friday. Wall Street, however, fell after the report fanned
inflation worries.

A separate report indicated the number of Americans filing
new claims for unemployment hit its lowest level since the start
of the pandemic.

Solid earnings, massive stimulus programmes and a pick-up in
the pace of COVID-19 vaccination have helped pushed the STOXX
600 up 12.1% so far this year, while Wall Street's S&P 500
has climbed 11.8%.

French spirits group Remy Cointreau slipped 3.3%
after hitting a record high as it topped estimates for full-year
operating profit growth and handed investors an 85% dividend
hike.

Construction materials group Saint-Gobain gained
4.2% after forecasting record operating income and margin in the
first half of the year.

Britain's biggest telecom group BT group fell 1.9%
after Deutsche Bank downgraded the stock to "sell", saying it is
overvalued.
(Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru;
Editing by Sriraj Kalluvila and Christina Fincher)