* Shares down for second day
* Materials sector leads losses (Adds analysis, quotes, stocks on the move)
By Charlotte Greenfield and Naomi Tajitsu
SYDNEY/WELLING TON, July 23 (Reuters) - Australian shares edged down 0.13 percent on Thursday as falling commodity prices dragged on the mining sector, but losses were limited by investors picking up bargains in the wake of the first drop in six days on Wednesday.
The S&P/ASX 200 index .AXJO lost 7.069 points to 5607.500 by 0134 GMT. The benchmark dipped 1.61 percent on Wednesday.
"It's surprising because we got whacked yesterday, but we're actually down again because commodities got hit hard," said Bill Keenan, general manager of equities at Lonsec.
Brent crude prices lost 1.6 percent LCOc1 on Wednesday after data showed U.S. crude inventories rose last week, while spot gold XAU= slid to a five-year low on a bounce by the US dollar. ID:O/R ID:GOL/
The materials sector suffered losses with Fortescue Metals FMG.AX losing 3.7 percent, BHP Billiton Ltd BHP.AX down 2.4 percent and Rio Tinto Ltd RIO.AX down 1.9 percent.
However Evolution Mining EVN.AX bucked the trend, soaring as much as 7 percent after Deutsche Bank raised its rating to buy from hold.
Gold miner Newcrest Mining also rose as much as 2.9 percent after announcing an increased gold production for the quarter ending June. ID:nL3N10310L
The financial sector was also down slightly with ANZ ANZ.AX dropping 0.8 percent and Westpac WBC.AX down 0.09 percent.
Shares of Macquarie Group Ltd MQG.AX rose as much as 2.1 percent after the company said its net profit for the year ending March 2016 will top the $1.6 billion recorded in the previous year. ID:nL3N10308N
For more individual stocks activity click on STXBZ
New Zealand's benchmark NZX50 index .NZ50 slipped 13.1 points or 0.2 percent to 5,914.68, easing from a life-time intraday high hit on Thursday as the domestic stocks tracked overseas markets down, knocking the telecommunications and materials sectors.
Spark SPK.NZ fell around 1.7 percent to NZ$2.910, retreating from a three-month high of NZ$2.985 after Morningstar lowered its rating on the telecom retailer to "hold" from "accumulate".
Telecom network operator Chorus CNU.NZ fell 1.4 percent, tracking losses in Spark, while Fletcher Building FBU.NZ fell 1.0 percent.
Bucking the selling was Xero XRO.NZ , which rose more than 2 percent to a one-month high of NZ$18.90 after the fast-growing, cloud-based software developer on Wednesday said it expected global revenues to double to NZ$200 million in the year to March 2016. ID:nNZW9zhdxH