(Updates throughout after U.S. market open as world shares hit

new record high)

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Wall Street returns from day off at record high

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Sterling slips as Bank of England edges toward rate cut

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Swiss franc drops too as its central bank cuts again

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Graphic: World FX rates http://tmsnrt.rs/2egbfVh

By Amanda Cooper and Marc Jones

LONDON, June 20 (Reuters) - Wall Street's raging Nvidia ( NVDA )

bulls stretched the run of record highs for global stocks on

Thursday after Europe had cheered as Switzerland chopped its

interest rates again and the Bank of England hinted it could

start cutting soon too.

U.S. traders returned from a day off by pushing chip giant

Nvidia ( NVDA ) - which has just overtaken Microsoft ( MSFT )

as the world's most valuable company - up another 3% in early

dealing.

It had been already been an action-packed day for Europe.

The BoE kept UK rates at a 16-year high of 5.25%, but said the

decision not to cut had been "finely balanced", wording

economists took as a signal an August cut was on the table.

The Swiss National Bank did not need to wait. It cut its

interest rates for a second time this year, which knocked the

Swiss franc , while Norway's Norges Bank

left rates unchanged, as expected.

Wall Street's early rise saw the MSCI All-World index

hit a new all-time high for the second day

running and take its rally this year to almost 11%.

In Europe, the FTSE 100 was up 0.5% near its highs

of the day and the pound was down 0.2% at $1.2688

against the dollar after the BoE. The regional STOXX 600

and the euro were respectively up and down by roughly

the same too.

The stars have been aligning for a UK rate cut. Data this

week showed consumer inflation fell to 2% for the first time

since 2021 in May, although service-sector price pressures and

wage growth are still running hotter than the BoE would like.

"The broader message is that inflation pressures are fading

in the UK - a trend that was acknowledged by policymakers," UBS

Global Wealth Management chief euro zone and UK economist Dean

Turner said.

"To avoid a passive tightening in monetary policy, the Bank

will soon have to lower interest rates to keep up with inflation

on the way down, as it did on the way up. The Swiss National

Bank's decision to lower interest rates for a second time this

morning is illustrative of this broader trend. We expect the BoE

to join the cutting cycle when they meet in August," he said.

DOLLAR GAINS

With the pound under pressure, the dollar index,

which measures the U.S. currency against six others, rose 0.2%

to 105.39.

Gold, which tends to perform well in an environment

of lower rates, was up 0.6% at $2,339 an ounce, having touched

its highest since the start of June earlier on.

A surge in tech stocks on Tuesday lifted AI chipmaker Nvidia ( NVDA )

above Microsoft ( MSFT ) as the world's most valuable

company, leading to a global rally in tech shares.

With U.S. markets having been closed for a holiday on

Wednesday, the early gains on Thursday lifted the tech-heavy

Nasdaq 100 up 0.6% and the S&P 500 up 0.4% to its own all-time

high.

"Nvidia ( NVDA ) remains the most important stock in the world,"

Chris Weston, head of research at Pepperstone, said in a note.

Weston, though, cautioned that index market breadth has been

poor, with participation underwhelming, suggesting the rally has

been built on a shaky foundation.

"The fact remains the market is now all in on the rally in

AI-related names and big tech and given the lack of clear

immediate risk the path of least resistance is for higher equity

index levels," Weston said.

Investors are waiting for more data to give an idea of when

the Federal Reserve might start cutting rates, after the U.S.

central bank last week projected just one rate cut in the year

and policymakers this week have also been cautious.

The Japanese yen reached its weakest level against

the dollar since late April on Thursday, touching 158.41. Much

of the decline in the value of the currency has been the product

of the wide gap between Japanese and U.S. interest rates.

In commodities, oil prices rose, with Brent up 0.3%

at $85.32 a barrel, while U.S. crude for August delivery

was up 0.1% at $80.77.