Australian shares closed higher on Friday, lifted by heavyweight financials, as market participants priced in the possibility of interest rates in the country staying higher for longer ahead of a key domestic inflation report due next week.

The S&P/ASX 200 benchmark index ended 0.4% higher at 7,643.6 points. The benchmark fell 0.2% during the week.

Financial stocks typically bask in the benefits of operating in a high-interest-rate environment.

Leading the climb, Australian lenders advanced 0.7%, with the 'Big Four' banks adding between 0.3% and 1.1%. The sub-index marked its thirteenth weekly gain.

Investors shifted their focus to Australia's inflation print for further cues on the Reserve Bank of Australia's policy decision next month, after news that the central bank had considered hiking rates by another quarter-point shocked markets.

Tech stocks climbed 1.5% to a two-year high after AI darling Nvidia's stunning results sparked a wave of record highs from Asia to Europe and the United States.

"Although the Australian market did not reach new record today, it have been positively bolstered by the prevailing broad-based optimism in the global money market," said Hebe Chen, market analyst, IG Markets.

ASX-listed shares of Block emerged as top gainers in the benchmark index, adding 16.5% to hit their highest level since last August. The Afterpay-owner reported better-than-expected core earnings for the quarter.

Miners fell 2.2% this week, losing for the third consecutive week.

"The mining sector has undergone a reality check this week as both BHP and RIO delivered lackluster earnings reports," Chen added.

Gold stocks shed 4.2% during the week to hit a four-month low.

Across the Tasman Sea, New Zealand's S&P/NZX 50 index rose 0.3% to 11,719.82.

Top gainers Warehouse and Fisher & Paykel Healthcare added 3.8% and 2.8%, respectively.

(Reporting by Sneha Kumar in Bengaluru; Editing by Sherry Jacob-Phillips)