The benchmark S&P/ASX200 index ended 10 points, or 0.14 per cent higher, at 7241.8.
The index climbed to its best level since May 30, despite giving up much of the intra-day gains amid low trading volumes ahead of the US Thanksgiving holiday.
The broader All Ordinaries rose 9.8 points or 0.13 per cent to 7432.2.
"The market is just happy to float higher and focus on the positives but we're a bit overcooked to the upside, to be honest," said Australian Stock Report private client advisor Ben Le Brun.
"That just goes to show how much money there is on the sidelines, just looking for any opportunity to get involved."
The gains on Thursday came after minutes from the November meeting of the US Federal Reserve showed officials favoured moderating rate hikes in the coming months, a scenario that is favoured by traders worried about a global recession due to aggressive central bank action.
It led to all three major indexes on Wall Street closing higher.
In the local market, gains were led by mining and technology stocks but these were nearly offset by declines in energy and consumer stocks.
Gold stocks were the best performers of the session after the price of the precious metal firmed up following the release of the Federal Reserve's minutes. Shares in St Barbara Mining, Evolution Mining, Northern Star and Newcrest Mining advanced 2.5-6.5 per cent.
Top iron ore miners BHP, Rio Tinto and Fortescue ended 0.5-1.5 per cent higher as the price of the steel-making ingredient recovered following liquidity easing measures in China.
Beaten down local technology shares also followed their US counterparts higher. Brainchip, Megaport, Link and Wisetech were the best performers, climbing 3-8 per cent.
However, energy stocks bucked the trend as crude prices slipped after the Group of Seven nations suggested a price cap on Russian oil, raising supply fears in a tight market.
Woodside Energy and Santos shares dropped 1.5 per cent each. New Hope Coal slid nearly 9 per cent to $5.41 after reporting lower quarterly production due to wet weather and floods, with larger rival Whitehaven Coal also falling nearly 7 per cent to $8.98.
Each of the Big Four banks - CBA, NAB, Westpac and ANZ - ended in the red.
Among consumer staples, supermarket rivals Woolworths, Coles and Metcash lost between 0.5 and 1 per cent.
Harvey Norman shares ended 1.4 per cent lower at $4.17 despite the electronics and furniture retailer announcing solid first quarter sales growth in Australia and even better numbers in Malaysia.
Qantas shares gave up most gains but still ended 0.2 per cent higher, a day after the national carrier upgraded its half-year profit forecast due to strong travel demand.
Shares in Kogan.com jumped 8 per cent to $3.70 after the online retailer said it expects to return to historically higher operating margins during the second half of the current financial year.
Meanwhile, the Australian dollar rallied to 67.55 US cents on Thursday, from 66.43 US cents at Wednesday's ASX close, as its US counterpart retreated on the prospects of a slowdown in rate hikes by the Federal Reserve.
ON THE ASX:
* The benchmark S&P/ASX200 index ended 10 points, or 0.14 per cent higher, at 7241.8 on Thursday.
* The broader All Ordinaries rose 9.8 points or 0.13 per cent to 7432.2.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 67.55 US cents, from 66.43 US cents at Wednesday's close
* 93.84 Japanese yen, from 93.91 Japanese yen
* 64.73 Euro cents, from 64.34 Euro cents
* 55.87 British pence, from 55.88 British pence
* 107.98 NZ cents, from 107.73 NZ cents.
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