The FTSE MIB rose 1.1% to close at 52,381 on Thursday, led by a rebound in AI-related stocks.
Semiconductor shares rebounded from yesterday's slump amid reports that orders for SK Hynix ADRs are oversubscribed, easing concerns of overinvestment on chip producers.
STMicroelectronics surged 7.2%, leading gains on the index, followed by Prysmian (+2.4%).
Financial stocks also outperformed, with the BTP-Bund spread narrowing to 75 basis points.
UniCredit gained 2.6% while on the verge of acquiring Commerzbank's shares up to nearly 48%, although employee opposition to a potential takeover persisted.
Meanwhile, defense declined and energy stocks remain pressured by volatile oil prices.