The pan-European Stoxx 600 climbed 0.7% early in the session, with tech stocks adding 1.3% to lead gains as all sectors except oil and gas entered positive territory.

It comes after comments from President Donald Trump which served to cool panic over rising tensions in the Middle East. Trump said Wednesday that Tehran “appears to be standing down” following missile strikes on Iraq airbases housing U.S. troops in retaliation to the killing of Iran’s top military general, Qasem Soleimani.

Trump added Washington would “immediately impose additional punishing economic sanctions on the Iranian regime” and called on U.S. allies including Britain, Germany and France to withdraw from the 2015 Iran nuclear deal and work to form a new agreement.

Separately, a report out Wednesday said two rockets hit the Green Zone in Baghdad, a day after the Iran retaliatory attacks. But Iraq’s military reportedly said there were no casualties.

In Asia, MSCI’s broadest index of Asian shares excluding Japan surged 1% amid the de-escalation in U.S.-Iran tensions.

Back in Europe, European Commission President Ursula von der Leyen said Wednesday that the U.K. would find it “basically impossible” to negotiate all aspects of its future relationship with the EU by the end of 2020. The bloc’s recently appointed leader also said the relationship between the two countries “cannot and will not be the same as before.”

As for economic data, German factory output posted its biggest increase in a year and a half in November, rising 1.1% on the month to beat expectations and provide a signal that Europe’s largest economy gained momentum at the end of 2019.

Marks & Spencer shares plunged 7.5%, on track for their worst day since May of last year, after the British retailer reported a 0.6% fall in revenue in the third quarter of 2019 and suggested its 2020 gross margins will be at the lower end of its guidance.

At the other end of the European benchmark, Argenx climbed 6% after the Dutch biotech company announced positive phase two proof-of-concept data for an antibody trial and confirming its 2021 vision.

Belgian biopharma company UCB added 4.2% after Jefferies upgraded the stock from “hold” to “buy.”

Tesco surpassed domestic competition to report a modest 0.1% Christmas sales rise, commenting that the festive period was “subdued” for consumer spending. Shares of Britain’s biggest retailer gained 1.7% in early trade.

Source: CNBC.com