By Hanna Paul
July 31 (Reuters) - Australian shares pulled higher on Monday morning as upbeat commodity and metal prices boosted the materials sector.
The S&P/ASX 200 index .AXJO rose 18.98 points, or 0.3 percent, to 5,721.8 at 0205 GMT. The benchmark fell 1.4 percent on Friday.
The material sector, accounting for over half the gains in the benchmark, was led higher by global miner BHP Billiton (LON:BLT) BHP.AX which rose 2.2 percent to its highest since February.
The metal and mining stocks .AXMM gained as much as 2.1 percent.
Growth in China's manufacturing sector slowed marginally in July, an official survey showed, although the underlying picture was one of stable growth in the world's no. 2 economy - a major market for Australia. and gas majors Woodside Petroleum WPL.AX and Oil Search OSH.AX rose 0.9 percent and 1.1 percent, respectively, both reversing two days of losses on the back of an uptick in global oil prices.
Oil prices rose as a dip in U.S. production tightened the market while iron ore prices followed suit, jumping 7.3 percent to its highest in three months. O/R IRONORE/
The mining and energy sectors are being driven by a positive performance in the underlying commodities, said Ric Spooner, chief market strategist at CMC Markets.
"People are switching out of other things to get into material stocks so there may be some sort of selling in financials to make way for the portfolios in mining stocks," Spooner said.
The laggards were led by Westpac Banking Corp WBC.AX and Australia and New Zealand Banking Corp ANZ.AX , down 0.1 pct and 0.2 pct, respectively.
Infrastructure companies Lendlease Group LLC.AX and Mirvac Group MGC.AX edged lower after an industry survey showed sales of new homes in Australia fell to its lowest since 2013. Zealand's benchmark S&P/NZX 50 index .NZ50 rose 29.59 points, or 0.4 percent, to 7,669.1 at 0206 GMT.
Industrial stocks provided the biggest boost to the index with Auckland International Airport AIA.NZ among the top percentage gainers, rising over 1.8 percent.