News: XEJ Australia shares edge higher after US House votes to suspend debt ceiling

June 1 (Reuters) - Australian shares rose on Thursday, recovering from losses in the early session after U.S. lawmakers voted to approve a bill in a move to avoid a crippling default, cheering investors.

The S&P/ASX 200 index (xjo) rose 0.5% to 7,091.3 by 0132 GMT. The benchmark declined 3% in May.

A majority of the U.S. House of Representatives voted on Wednesday to approve a bipartisan bill to suspend the government's $31.4 trillion debt ceiling, just five days before the deadline to avoid a crippling default.

Voting continued on the legislation, which must also be approved by the Democratic-majority Senate before President Joe Biden can sign the measure into law.

Local gold stocks .AXGD jumped 2.3%, leading the gains on the benchmark, with country's largest gold miner Newcrest Mining (NCM) gained about 3%.

Energy stocks .AXEJ gained 0.5%, with sector major Santos (STO) up as much as 0.4%.

Meanwhile, factory activity in China, the country's top trade partner, shrank faster than expected in May on weakening demand, heaping pressure on policymakers to shore up a patchy economic recovery and knocking Asian financial markets lower.

Bucking the trend miners .AXMM slipped 0.3%, with BHP Group (BHP) and Rio Tinto (RIO) shedding as much as 0.2% and 0.8%, respectively.

Locally, Australian home prices rose for a second straight month in April after slumping about 9% from May 2022 to February this year, suggesting the fall in the country's property prices had bottomed out and the market was now rebounding.

Heavyweight financial stocks .AXFJ edged 0.6% higher, while technology stocks .AXIJ gained 1.3%.

In New Zealand, the benchmark S&P/NZX 50 index (nz50) rose 0.5% to 11,875.05.