* Aussie shares rise 0.7 percent
* Materials and financials lead the gains
* NZ falls on utilities and consumer discretionary
By Aditya Soni
Feb 1 (Reuters) - Australian shares rose on Thursday, underpinned by strong gains in mining stocks and financials after an upbeat lead from Wall Street, while sentiment also got a boost from data showing Australia's manufacturing expanded last month.
The S&P/ASX 200 index climbed 0.7 percent or 42.7 points to 6,080.4 by 0109 GMT. The benchmark added 0.3 percent on Wednesday.
Australian manufacturing posted solid expansion last-month with demand, both domestically and from offshore, strong enough to allow firms to raise prices to protect profit margins, a survey showed on Thursday. "Overall, commodities are positive, U.S. dollar still remains under pressure which further helps materials, and Aussie dollar remains relatively strong," said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.
Somasundaram said financials are dependent on currency movement at the moment, with a stronger local currency sparking a rally and vice-versa.
The Aussie dollar advanced as much as 0.2 percent to 0.8070, after stumbling on Wednesday. Financials led the gainers, with its index jumping to a near 2-1/2-week high. The big four banks rose between 0.6 percent and 1.2 percent.
Australian Prudential Regulation Authority (APRA) on Thursday released a progress report into an inquiry into the Commonwealth Bank of Australia (CBA) , but reserved its observations on governance, culture and accountability for its final report, due by the end of April. The inquiry was carried out in response to accusations of massive breaches of money-laundering rules at the bank. CBA's shares rose 1.1 percent, accounting for most of the gains on the index.
Materials were also sought out in early trade, with mining giant BHP up 0.9 percent and rival Rio Tinto Ltd tacking on 0.3 percent.
Copper rose 1 percent on Wednesday as the dollar slid towards its biggest monthly loss against the euro in two years.
Household appliances distributor GUD Holdings Ltd soared 5.1 percent to a seven-month high and was the biggest percentage gainer on the benchmark.
Investors will watch out for China's factory growth data due later in the day. The Asian giant is Australia's largest trading partner and key Chinese data are a potential market mover. New Zealand's benchmark S&P/NZX 50 index declined 0.6 percent or 49.4 points to 8,392.61, pressured by broad losses.
Utilities and consumer discretionary were the top losers, with Skycity Entertainment Group Ltd declining 2.2 percent and Spark New Zealand Ltd losing 0.7 percent.
(Reporting by Aditya Soni in Bengaluru; Editing by Shri Navaratnam)
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