Australian shares finished higher in pre-Christmas trade on Thursday, as the country's most populous state showed signs of getting a COVID-19 outbreak largely under control, sparking hopes that the economy would soon be back on a path to recovery.

New South Wales maintained a steady downward trend in COVID-19 cases as it attempts to contain an outbreak in capital Sydney, reporting nine fresh local infections versus eight on Wednesday.

The state has eased some virus curbs for the Christmas holidays but the most affected northern coastal suburbs of Sydney remain under strict lockdown.

The S&P/ASX 200 index rose 0.3% to close at 6,664.8.

The benchmark ended 0.2% lower for the week, as gains in the last two trading days offset most of the losses earlier in the week.

Australia and New Zealand markets closed early on Thursday and will remain shut on Friday and Monday for Christmas and Boxing Day holidays.

Energy stocks gained 1.1% to lead gains as oil prices firmed after data showed US stockpiles of crude and gasoline fell last week, stoking demand hopes. However, the sub-index still registered a second straight weekly loss.

Woodside Petroleum and Santos gained 0.8% and 2.6%, respectively.

Global miners BHP Group and Rio Tinto were the top boosts to the metals and mining sub-index which rose 0.8% on the day, but lost 0.7% for the week after clocking gains in the last seven.

Financials and consumer stocks also saw gains ahead of the Christmas weekend.

Healthcare stocks were the only major sub-index in the red, with industry giant CSL accounting for a bulk of the losses.

New Zealand's benchmark S&P/NZX 50 index settled 0.1% higher at a record high of 13,037.94, with financials and healthcare providing the biggest boosts.