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Swedish stocks touch record highs, crown falls after new rate cut

* Swedish crown slumps against euro

* Sweden's OMXS30 hits new record highs

* Swedish 10-year bond yields fall to record lows

* Norwegian crown also falls (Adds detail, investor comment)

By Sudip Kar-Gupta

LONDON, March 18 (Reuters) - Sweden's stock market hit record highs while the crown fell on Wednesday after the country's central bank cut its key repo rate and launched a new round of quantitative easing to fight deflation.

Sweden's Riksbank cut its key repo rate by 0.15 percentage points to -0.25 percent and said it would buy 30 billion crowns ($215.72 million) of government bonds after already completing 10 billion crowns of purchases.

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The OMXS30 index rose 1.7 percent to a new intraday record high of 1,704.61 points, beating a previous record high of 1,701.07 points set on March 2. The index later eased back to trade up 1.6 percent at 1,702.71 points by 1420 GMT.

Sweden's crown also slumped against the euro while yields on 10-year Swedish government bonds dropped almost 20 basis points to a record low of 0.425 percent.

The Norwegian crown , already under pressure from falling oil prices and which often follows its Swedish peer, also hit a 13-year low of 8.4166 crowns per dollar and was down over 1 percent on the day.

"The Riksbank's move is a supportive factor for the Swedish equity market. It adds liquidity to the system and shows their determination to fight deflation," said Francois Savary, chief strategist at Swiss bank Reyl.

The OMXS30 index outperformed a 0.1 percent rise on the pan-European FTSEurofirst 300 index and a 0.3 percent fall on Germany's DAX.

Among Swedish blue-chip stocks making ground were industrial company Atlas Copco (Other OTC: ATLCF - news) , which rose 3.6 percent, and engineer Sandvik (Other OTC: SDVKY - news) , which advanced by 3.1 percent.

Mattias Sundling, chief equity strategist at Danske Bank (Other OTC: DNSKF - news) , said that while the Riksbank's move could put pressure on Swedish banks, it would benefit industrial stocks and other "cyclical" stocks geared towards any recovery in the Swedish economy. Banks often stand to make less money from loans in a low interest-rate environment.

"The losers could be the financials but the winners should be industrials and cyclicals," said Sundling.

The OMXS30 index is up by around 16 percent since the start of 2015. (Additional reporting by Emelia Sithole-Matarise and Patrick Graham; Editing by Francesco Canepa)