The Australian sharemarket rallied on Friday as investor optimism over the direction of interest rates was bolstered by the European Central Bank (ECB) joining the Bank of Canada in cutting interest rates.

The ASX 200 Index rose 38.2 points, or 0.5 per cent, to 7860, supported by gains in the shares of mining and consumer discretionary companies.

For four out of five trading sessions this week, the sharemarket benchmark has finished in the green, particularly lifted by a tech stock rally on Thursday after US computer chipmaker Nvidia topped a market valuation of $US3 trillion ($4.5 trillion). The ASX 200 was up 2 per cent for the week.

Gold miners Newmont (up 2.9 per cent) and Evolution Mining (up 1.8 per cent) were among the biggest large-cap advancers on Friday after the price of bullion jumped 1 per cent. Index heavyweights BHP (up 1.1 per cent) and Fortescue (up 1.3 per cent) were also among the best performers, while Wesfarmers (up 1.3 per cent) helped to boost the consumer discretionary sector.

Information technology (down 0.1 per cent) was the only sector in the red after a bumper rally on Thursday. Shares of data centre operator NEXTDC dipped 0.5 per cent.

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While domestic economic conditions, especially inflation, remain the primary concern of the Reserve Bank of Australia, investors are becoming more bullish after eyeing interest-rate moves in other regions, including Canada, where its central bank cut its cash rate by a quarter of a percentage point to 4.75 per cent on Wednesday.

The ECB also cut its key rate by a quarter of a percentage point on Thursday, with ECB president Christine Lagarde saying inflation in the region had eased enough for it to begin lowering rates.

At a Senate estimates hearing on Wednesday, RBA governor Michele Bullock reaffirmed the Reserve would not lower interest rates until inflation came down. It wants to get inflation back within its target range of 2 per cent to 3 per cent.