* FTSEurofirst 300 rises 0.6 percent in early trading
* Germany's DAX up 0.6 pct after new record high
* Fresenius Medical Care jumps on reimbursement news
By Atul Prakash
LONDON, Nov 25 (Reuters) - The FTSEurofirst 300 share index climbed towards a recent five-year high and Germany's DAX set a new record on Monday, with a breakthrough nuclear deal between Iran and world powers raising appetite for risky assets.
The interim agreement halts Iran's most sensitive nuclear activity, its higher-grade enrichment of uranium, and suspends sanctions by the United States and the European Union on several other sectors of Iran's economy for an initial six-month period.
"The Iran deal reduces the medium term global geopolitical risk. In the short term, it should improve the equity market's technical picture and inflows into risky assets," Didier Duret, chief investment officer at ABN-AMRO Private Banking, said.
"Investors should take advantage of the positive context to diversify into a large span of stocks to get exposure to the broadening economic recovery and a low volatility environment."
At 0834 GMT, the pan-European FTSEurofirst 300 was up 0.6 percent at 1,304.02 points. The index climbed to a five-year high of 1,316.42 earlier this month and is up more than 14 percent so far this year. Germany's DAX rose to a record high and was last up 0.6 percent.
Most cyclical sectors in Europe were up, with technology , travel and autos rising 0.7 to 1.3 percent. French car makers PSA Peugeot Citroen and Renault, which had a significant exposure to the Iranian car market before the sanctions against Tehran were toughened, gained 4.2 percent and 1.9 percent respectively.
However, energy shares fell 0.1 percent, tracking oil prices, which fell following the Iran nuclear deal that eased supply concerns.
Analysts said that European shares could break the sideways pattern, which has been in place since a batch of lower-than-expected company results and concerns over the outlook for the U.S. Federal Reserve's stimulus measures halted the market's rally.
The market's broader picture was seen positive. EPFR data showed Europe equity funds were on track for a new full year inflow record as they took in another $1.93 billion, their 21st consecutive weekly inflow.
However, French equity funds witnessed outflows on a ratings downgrade and on concerns the economy could be back in recession by the end of the year.
Among top individual movers, German dialysis provider Fresenius Medical Care surged 7.5 percent, the top gainer on the FTSEurofirst 300, after a U.S. healthcare agency said it would not cut reimbursement rates for kidney dialysis in 2014 as was proposed in July.