Europe shares reverse losses as US stocks recover

LONDON, July 3 (Reuters) - European shares reversed an afternoon decline to rally on Thursday, mirroring a recovery in U.S. stocks, which bounced back after a surprisingly weak reading of service sector activity.

Banks were the top performers on the market, led by BNP Paribas (BNPP.PA: Quote, Profile, Research) and Royal Bank of Scotland (RBS.L: Quote, Profile, Research), which rose 3.6 and 2.5 percent, respectively.

By 1425 GMT the FTSEurofirst 300 index of top European shares was up 0.4 percent at 1,172.09 points.

U.S. benchmark indexes .DJI .SPX .IXIC were trading between 0.1 percent down and 0.5 percent up.

(Reporting by Amanda Cooper)