Australian shares ended higher on Thursday as mining stocks gained on higher iron ore prices, while Fortescue Metals jumped on raising its annual iron ore shipments outlook.

The S&P/ASX 200 index ended 1.3% higher at 7356.9 points at the close of trade. The benchmark closed 0.8% lower on Thursday.

China will tackle bottlenecks in supply chains affected by COVID-19 by easing congestion at ports and airports and restoring delivery services, according to a State Council meeting chaired by Premier Li Keqiang.

The country, Australia's largest trading partner, also said it will step up infrastructure construction to boost domestic demand and drive economic growth going forward, state TV reported, citing a top economics meeting chaired by Chinese President Xi Jinping.

Australia's domestic miners' sub-index, which form a bulk of the benchmark, added 3.6% with BHP Group and Rio Tinto adding 4.4% and 3.5%, respectively.

Fortescue Metals Group, the second-biggest gainer on the mining index, rose about 8% after raising its full-year full-year iron ore shipments forecast.

Mining stocks are well placed and have been reporting strong numbers, despite pandemic-related issues, Brad Smoling, managing director of Smoling Stockbroking, said.

"You've got really good potential and more capital growth with a lot less risk from them compared with other sectors".

Financial stocks snapped their three-day losing streak, rising 0.7%, with three of the so-called "Big Four" banks trading in positive territory.

Wealth manager AMP Ltd rose 13% to lead gains on the benchmark after announcing the sale of its infrastructure equity business.

Gold stocks emerged as the sole loser on the benchmark as bullion prices fell to a two-week low.

New Zealand's benchmark S&P/NZX 50 index ended 1.3% or 11,875.96 points higher. (Reporting by Jaskiran Singh in Bengaluru; Editing by Shounak Dasgupta)