MUMBAI, Aug 26 (Reuters) - STOCKS:

The benchmark BSE Sensex was up 0.8% to 25,018.75,

while the broader NSE index was up 0.8% to 81,760.59

after U.S. Federal Reserve Chair Jerome Powell signalled that

interest rate cuts were on the horizon.

RUPEE:

The Indian rupee strengthened 0.03% versus the U.S.

dollar, and quoted at 83.8625 per dollar as foreign banks'

dollar bids eroded the currency's early gains.

GOVERNMENT BONDS:

The benchmark 10-year bond was quoted at 101.74

rupees, with the yield down 1 bps at 6.8488% after Fed Chair

Powell signalled that the central bank will most likely start

cutting interest rates from September.

OVERNIGHT INDEX SWAPS:

The one-year overnight index swap rate was

down 2 basis points from 6.48% previous close, while the

five-year swap rate was down 3 bps against

6.05% previous close.

CALL MONEY:

India's overnight call money rate was up 5 basis

points at 6.60%, up from 6.50% previous close. The overnight

TREPS rate was at 6.55%, compared with previous

close of 6.32%.

(Reporting by Bhakti Tambe)