The FTSE MIB rose 0.4% to close at 52,614 on Friday, supported by strong gains in the financial and payment sectors.
Nexi led the index with a 6.7% jump after the European Parliament approved its negotiating position on the digital euro.
Stellantis was the second-best performer, climbing 3.4%.
Financial stocks also advanced as the US and Iran confirmed that negotiations were underway, despite Washington denying any extension of the ceasefire.
Azimut, Unipol, Mediobanca, Intesa Sanpaolo, Banco BPM, and FinecoBank all gained more than 1%, while UniCredit rose 1.3%, riding the news of a possible takeover of Commerzbank.
Meanwhile, defense stocks extended recent losses despite earlier talks of an increase in military spending from NATO countries.
AI-linked stocks remained volatile, with Prysmian falling 1.1% and STMicroelectronics losing 1.0%.
Energy major Eni also declined 1.2% amid continued volatility in crude oil prices.
For the week, benchmark index declined 0.9%.