Strait of HormuzEuropean stocks are set to inch higher on Friday as investors assess prospects for a potential extension of the ongoing fragile ceasefire between the U.S. and Iran.Germany's Dax is on course to open 0.28% higher and France's Cac 40 is poised to rise 0.22%, while London's FTSE 100 looks set to open broadly flat, according to IG data. Asian markets looked past renewed Iranian military activity, with South Korea's Kospi and Japan's Topix hitting record highs overnight.Iran's armed forces reportedly fired missiles at unspecified targets late Thursday, according to state media outlet Fars.The latest military activity in southern Iran came just hours after the Pentagon said Tehran had fired a ballistic missile toward Kuwait and deployed attack drones in and around the Strait of Hormuz.Earlier on Thursday, a White House official confirmed an Axios report saying the U.S. and Iran had "mostly agreed" on the terms of a deal aimed at temporarily halting the three-month conflict.Reports suggest a deal would extend the ongoing ceasefire for 60 days and create the framework for talks on the future of Iran's nuclear program.Shares in Europe are hoping to bounce back from Thursday's losses after a rocky session saw the pan-European Stoxx 600 close down 0.5%. Most sectors in negative territory and major bourses in London, Paris and Frankfurt all ended the day lower. European defense stocks were a notable exception, rallying on Thursday after Ukraine's parliament ratified a 90 billion-euro ($104.6 billion) loan agreement with the EU.Reuters reported on Thursday that Zelenskyy and Swedish Prime Minister Ulf Kristersson will jointly announce an agreement to provide Ukraine with Gripen fighter jets, citing an anonymous source.The pair signed a letter of intent last October that could see Sweden sell as many as 150 Saab Gripen fighter jets to Ukraine.Saab topped the Stoxx 600, with the Swedish fighter jet maker closing the day 7.4% higher.German tank parts maker Renk advanced 5.4%, while France's Exail Technologies and Germany's Rheinmetall popped 13.2% and 4.2%, respectively.