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June 3 (Reuters) - European shares opened higher on

Monday, tracking gains in Asian equities, while investors braced

for a key interest rate decision from the European Central Bank

later in the week.

The pan-European STOXX 600 was up 0.5% by 0728 GMT,

extending gains for the third straight session.

The sentiment was upbeat as China's factory activity grew at

the fastest pace in about two years in May, while a softer U.S.

inflation print on Friday continued to spur hopes of interest

rate cuts this year by the Federal Reserve.

All eyes will now remain focused on the ECB's interest rate

decision on Thursday, where the central bank is expected to cut

borrowing costs by 25 basis points from its record-high levels,

according to a Reuters poll.

Most sectoral indexes traded higher, with technology stocks

among top boosts, up nearly 1%.

Among individual stocks, British drugmaker GSK

tumbled 9.7% after a Delaware judge allowed more than 70,000

lawsuits over discontinued heartburn drug Zantac to go forward.