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Australian shares closed marginally higher on Friday, helped by gains in mining and material stocks even as concerns over rising coronavirus cases kept many investors on the sidelines.

The S&P/ASX 200 index rose 0.4% to 6,033.60, recovering some ground after Thursday's 0.7% drop. For the week, it was up 1.5%.

Australia's Victoria state reported a record daily increase in COVID-19 cases while New South Wales said it was tightening some restrictions as authorities struggle to contain a new outbreak.

Helping investor sentiment, the Australian government on Thursday said it would inject a further A$1.5 billion ($1.05 billion) into a wage subsidy programme as the national unemployment rate hit a 22-year peak in June.

"It's (the market) sitting on a wall of worry right now," said Brad Smoling, managing director at Smoling Stockbroking.

"We have had such a sugar hit from all of the stimulus, we are taking a seat and wondering if we can keep going or start to fall over?"

The European Union will meet later in the day to discuss a proposed stimulus to kick-start the COVID-hit economy.

Mining stocks climbed 0.8%, led by a 4.4% rise in Alumina Ltd. South32 Ltd advanced 4.2%, while Rio Tinto closed 0.6% higher after touching a near six-month high earlier in the day.

Financial stocks rose 0.1%, with Westpac Banking Corp finishing 0.5% higher and National Australia Bank adding 0.2%.

The gold index rose 0.5%, led by a 4.6% jump in Alkane Resources Ltd, while Evolution Mining Ltd gained 2.4​%

In New Zealand, the benchmark S&P/NZX 50 index rose 0.7% to 11,584.1.

Restaurant Brands New Zealand Ltd gained 6.4%, while Property for Industry Ltd added 4.1%.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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