(Reuters) – European shares touched a record high Thursday, tracking broader gains in global equities, after the United States and Iran backed away from further military escalation in the Middle East.

Also lending support was confirmation from China on the signing of a “phase 1” trade deal with the United States next week, leading to an easing in trade related concerns.

The pan-European STOXX 600 index rose 0.6% to a record high of 420.98, while stocks in Germany .GDAXI, the bloc’s biggest economy, gained 1.1%.

German industrial production rose more than expected in November, data showed. However, a separate reading showed that the country’s exports sank well below expectations, indicating that demand for goods from the industrial powerhouse still remained languid.

Carmaker BMW (BMWG.DE) rose 0.8%, with traders saying brokerage Exane had upgraded the stock.

Technology .SX8P was the best performing regional subindex and gains were led by a 2% rise in chipmaker Infineon Technologies (IFXGn.DE).

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