Optimism regarding a potential end to the conflict with Iran propelled the Dax upward on Friday. The German benchmark index gained 1.4 percent to reach 24,558 points. U.S. President Donald Trump announced, as he has frequently in recent weeks, that an agreement with Iran is imminent. The Republican stated that a deal could be finalized in the coming days. However, some experts cautioned against premature celebrations. "These price gains may be built on sand if a credible end to the war is not confirmed by all parties," said Jochen Stanzl of Consorsbank. "The market will not be satisfied with a mere declaration of intent for long."

In the oil market, expectations of a peace deal caused prices to slide. Since Wednesday, Brent North Sea crude and U.S. WTI have each dropped by more than five percent to $88.16 and $85.13 per barrel, respectively. Shares in the travel and tourism sector trended higher at the end of the week: in the MDax, TUI and Lufthansa shares traded 5.6 percent and 4.6 percent higher, respectively.

Within the Dax, MTU and Heidelberg Materials were among the top performers, each posting a gain of 3.5 percent.

In the afternoon, investor focus is expected to shift toward the SpaceX initial public offering. Billionaire Elon Musk's aerospace company is debuting on the U.S. Nasdaq exchange with an issuance volume of $75bn, marking the largest IPO of all time. At an issue price of $135 per share, SpaceX is valued at $1.75 trillion. Musk has reserved an unusually large 30 percent of the 555.6m shares offered for retail investors, among whom he maintains a significant following. Experts suggest the market debut could test the ongoing recovery in equity markets.

(Reported by: Daniela Pegna, edited by Ralf Banser. For inquiries, please contact our editorial office at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)