Australian shares closed at their highest level in nearly 14 months on Thursday, extending gains from the previous session when mild inflation data pushed the benchmark index to snap its two-day losing streak.

The S&P/ASX 200 index closed 0.3% higher at 7,082.3. Gains in tech and gold stocks helped outweigh dismal trading updates from Woolworths and Fortescue Metals.

"The local market is extending yesterday's rally and rejoicing a paucity of inflation in the country," Henry Jennings, senior analyst at Marcustoday Financial Newsletter, said adding that the markets also took cues from firmer US futures and US President Joe Biden's stimulus plan for a $1.8-trillion stimulus.

The Australian Bureau of Statistics reported a lower-than-expected inflation for the March quarter on Wednesday.

Gold stocks rose 2.37% as bullion prices jumped overnight after the US Federal Reserve kept interest rates unchanged.

Australia's biggest gold miner Newcrest jumped as much as 2.7% after posting production of 512,424 ounces for the March period, beating the 491,539 ounces tipped by RBC analysts.

Technology stocks rose 2.25%, tracking strong quarterly results from Facebook and Apple overnight.

Buy now, pay later firm Afterpay Ltd led the gains, advancing 3.4%.

Supermarket giant Woolworths fell 3.9% following a quarterly result well below analysts' expectations, while rival Coles disproportionately benefited from this and rallied 3.4%.

Fortescue Metals dipped as much as 3.5% after reporting an increase in cost of production, partly attributed to the strengthening dollar and seasonally lower volumes.

Major miners took a dip in the price of iron ore in their stride, with BHP rising as much as 1.4% and Rio Tinto gaining 1.2%.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index rose 0.5% to 12,715.2.