GLOBAL MARKETS-World shares hit new record highs, dollar gains buoyed by Fed rate cut

By Chibuike Oguh and Marc Jones

NEW YORK/LONDON, Sept 18 (Reuters) - World equity markets rose to a fresh new peak on Thursday while the U.S. dollar gained against major peers, buoyed by the Federal Reserve's interest rate cut, while the pound dipped slightly after the Bank of England kept rates unchanged.

On Wall Street, all three indexes were trading higher with the Nasdaq gaining more than 1%. Intel INTC.O jumped more than 25% after Nvidia NVDA.O said it would invest $5 billion in the struggling U.S. chipmaker. Nvidia's shares were up 2.6% on the session.

The Dow Jones Industrial Average .DJI rose 0.33% to 46,170.33, the S&P 500 .SPX rose 0.68% to 6,644.94 and the Nasdaq Composite .IXIC rose 1.15% to 22,517.77.

The pan-European STOXX 600 .STOXX index rose 0.79%. MSCI's gauge of stocks across the globe .MIWD00000PUS rose 0.39% to 980.12, topping the previous session's record.

"Today's market action is pretty interesting," Sandy Villere, portfolio manager at Villere & Co in New Orleans.

"The Nasdaq is up more than the Russell 2000. I would've thought the Russell 2000 would start to act really well in the face of what looks like two more cuts in 2025. Small caps tend to do quite well in falling interest rates, but I think with the investment of Nvidia into Intel kind of has the NASDAQ maybe up just from that fundamental standpoint."

The Fed cut rates by 25 basis points on Wednesday and its closely watched "dot plot" had pointed to two more rate cuts over its remaining two meetings this year, but only one additional reduction in 2026.

The yield on benchmark U.S. 10-year notes US10YT=RR rose 4.2 basis points to 4.118%.

The BoE voted 7-2 to keep rates unchanged at 4% while slowing the annual pace at which the BoE sells gilts it purchased between 2009 and 2011 to 70 billion pounds from the current 100 billion pounds, in line with economist forecasts.

The dollar strengthened 0.47% to 0.792 against the Swiss franc CHF=EBS and was up 0.66% to 147.94 against the Japanese yen JPY=EBS.

The euro EUR= down 0.27% at $1.178 while the sterling GBP= weakened 0.57% to $1.3548.

Norway's central bank cut its policy interest rate by 25 basis points to 4.0%, as widely expected, and said it aims to cut again in the next 12 months but not by as much as previously planned. The Norwegian krone NOK remained near a three-year high.

Germany's parliament approved the nation's first annual budget since sweeping reforms to loosen fiscal rules were passed earlier this year. In France, hundreds of thousands took part in anti-austerity protests, unions said, urging President Emmanuel Macron and his new Prime Minister Sebastien Lecornu to acknowledge their anger and scrap looming budget cuts.

The yield on the benchmark German 10-year Bunds DE10YT=RR, the benchmark for the euro zone bloc, rose 4.1 basis points to 2.718%.

Oil prices fell. Brent crude futures LCOc1 dropped 0.68% to $67.49 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 fell 0.73% to $63.58.

Gold prices took a breather from record highs. Spot gold XAU= fell 0.55% to $3,639.52 an ounce.