Mining and energy stocks led Australian shares to close higher on Wednesday as oil prices rose, though gains were capped after central bank governor Michele Bullock said if inflation did not cool down, the Reserve Bank of Australia (RBA) might have to tighten monetary policy.

The S&P/ASX 200 index ended 0.3% higher at 7077.600. The benchmark closed higher for two straight sessions.

RBA governor Bullock on Wednesday said there were signs that inflation might be difficult to suppress and were it to remain higher than expected, the bank would have to respond with tighter monetary policy.

Investors also waited for local unemployment data due on Thursday - a crucial indicator of the RBA's monetary policy decision for next month.

"The interest rate situation is very much a global issue and I think that one of the ways they are dealing with that is certainly with hawkish rhetoric. I personally don't see interest rates going up in Australia for a while." said Damian Rooney, director of equity sales at Argonaut.

Energy stocks topped gains on the broader benchmark, rising 2.5%, as oil prices surged amid concerns of potential supply shortages due to the Israel-Hamas conflict.

The sub-index marked its highest since Sept. 29.

Shares of the country's top independent coal miner Whitehaven Coal jumped more than 11%, becoming the top gainer on the local bourse, after it reported a near 33% rise in its first-quarter production and acquired BHP's Daulia and Blackwater mines for $4.1 billion.

Heavyweight miners climbed 0.7% to notch a four-week high, as iron ore futures rose on improved Chinese economic data. Sector giant BHP group rose 0.7%, undettered by a near 4% drop in first-quarter iron ore output.

Bucking the trend, technology stocks ended 0.4% lower, tracking losses in the tech-heavy Nasdaq overnight.

New Zealand's benchmark S&P/NZX 50 index closed 0.6% higher at 11221.480.

(Reporting by Adwitiya Srivastava in Bengaluru; Editing by Nivedita Bhattacharjee)