Global equities, US dollar rise despite surprise weak China economic data

Markets reversed earlier session losses and were slightly higher. The MSCI world equity index, which tracks shares in 50 countries, was up 0.23 percent. Overnight in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan had closed 0.34 percent lower.

"You've been seeing a slowing trend in China amplified by the lockdowns," said Tom Plumb, portfolio manager at Plumb Balanced Fund in Wisconsin.

"The credit problems they've had especially with real estate developers, that's going to tie their hands for how aggressive they can go back to stimulation. But I think it's a sign they're going to try to be more accommodative."

The US dollar strengthened following news of the Chinese central bank action amid disappointing data. The dollar index, which measures the greenback against six peers, rose 0.785 percent, with the euro down 0.97 percent to $1.0158.

Oil prices dropped by more than 3 percent on demand concerns after the weak data from China, one of the largest importers of crude. Brent crude futures settled down 3.1 percent to $95.10 a barrel, while US West Texas Intermediate crude closed at $89.41, down 2.9 percent.

On Wall Street, major indexes climbed, reversing earlier session losses, following four straight weeks of gains and a likely moderation on US Federal Reserve interest rate hikes after a slowdown in inflation.

The Dow Jones Industrial Average rose 0.42 percent to 33,903.57, the benchmark S&P 500 gained 0.37 percent to 4,296.09 points, and the Nasdaq Composite added 0.59 percent to 13,123.89.

US Treasury yields were slightly lower as the market continued to assess to what extent a slowdown in inflation could impact the US Federal Reserve's monetary tightening policies.

Benchmark 10-year Treasury yields were down to 2.795 percent from a 2.849 percent close last week. Two-year note yields fell to 3.1988 percent from 3.257 percent.

Gold fell over a percent to its lowest in a week on Monday amid sharp declines across precious metals due to a stronger dollar, with concerns over further rate hikes by the US Federal Reserve adding to pressure on bullion.

Spot gold dropped dropped 1.3 percent to $1,778.53 an ounce, while US gold futures fell 1 percent to $1,781.40 an ounce.