Australian shares edged higher on Friday morning on the back of gains on Wall Street, but investors tiptoed cautiously amid the backdrop of tensions in Ukraine and ahead of a crucial U.S. jobs report.

Most sectors were up modestly, with gold and oil stocks leading the way as markets kept a watch on diplomatic efforts to resolve the Ukraine crisis.

Australia's top oil and gas producer Woodside Petroleum Ltd climbed 0.6 percent and Santos Ltd jumped 1.3 percent after U.S. oil rose as traders reconsidered the geopolitical risks of Russia's intervention in Crimea.

The world's no.3 gold producer Newcrest Mining Ltd gained 1.3 percent and Beadell Resources Ltd jumped 2.6 percent.

On the whole, it was a quiet early session with 154.1 million shares changing hands compared to a daily moving average of 597 million so far in 2014.

"The market's very quiet, there's low volumes, there's really no lead out there," said Shawn Hickman, managing director at Market Matters in Sydney.

"To a certain degree, our market started off weak with what's been happening in the Ukraine and Russia and it's just having a rest ahead of the weekend."

The S&P/ASX 200 index added 13.8 points, or 0.3 percent, to 5,459.7 by 0120 GMT, hovering near 5-1/2 year highs of 5,461.7 touched on February 25. At the current level, the benchmark is up 1 percent for the week.

U.S. stocks mostly rose on Thursday, with the S&P 500 closing at yet another record on better-than-expected jobless claims data and the European Central Bank's move to keep rates unchanged.

Friday's session got off to reassuring comments from the Australian central bank chief.

Reserve Bank of Australia Governor Glenn Stevens, in his twice-yearly parliamentary testimony, said that record low interest rates were helping the economy transition away from mining-led growth as well as can be expected and plotted a steady trajectory for monetary policy.

The financial sector was the biggest drag on the market, with all 'Big Four' banks falling. Westpac Banking Corp dropped 1 percent and National Australia Bank lost 0.4 percent. Market Matters' Hickman said some investors were switching into resources from the banking sector, noting that the likes of Westpac was becoming pricey after racing to four-month highs earlier this week

Liquefied Natural Gas Ltd soared 11.8 percent to 3-1/2 month highs of A$0.43 after the U.S. Department of Energy authorised its Magnolia project to export to free trade agreement countries.

Global miner Rio Tinto Ltd pledged on Thursday to press ahead with finalising an investment framework for the long-delayed Simandou iron ore project. Shares in Rio were up 1.2 percent.

New Zealand's benchmark NZX 50 index rose 0.1 percent to hover at all-time highs of 5,120.5, underpinned by an improving economy.