* 10-year bond yield ends 1 bp lower at 7.82 pct
* 1-yr swap rate hits 2-yr low, 5-yr at 6-mth low on rate cut hope
* Sell-off in commodities seen helping ease CAD concerns
By Archana Narayanan
MUMBAI, April 16 (Reuters) - India's 10-year bond yields fell on Tuesday but came off their near two-month lows hit earlier as traders cashed in profits after the recent rally on easing global commodity prices fuelled hopes the central bank would cut interest rates next month.
The current sell-off in commodities, with brent crude sinking below $100 a barrel for the first time in nine months and gold plunging to a more than two-year low, is seen helping ease India's current account deficit (CAD) concerns.
The current account deficit is a key variable in the central bank's monitoring menu.
The recent spate of data showing easing wholesale and retail inflation, and industrial output barely growing has raised hopes the central bank is more likely to cut the benchmark repo rate from 7.5 percent at its next policy review on May 3.
The Reserve Bank of India has cut interest rates in the last two successive policy reviews by 25 basis points each, but had signalled a limited room for further easing.
"The fall in gold and brent will help India in CAD reduction, fiscal deficit reduction, and bringing down the inflation expectations," said Sandeep Bagla, executive vice president with ICICI Securities Primary Dealership.
"Bonds are a slave to inflation and in absence of high inflation, yields have to come down in the medium run," said Bagla, adding he expects the yield to come down to 7.70 percent in the near term.
Bagla expects a 25 to 50 basis point rate cut in the May policy.
The 10-year bond yield ended 1 basis point down at 7.82 percent. The yield had slid to a low of 7.80 percent earlier in the session, a level last seen on Feb. 28.
The current account deficit hit an all-time high of 6.7 percent of gross domestic product in the December quarter on heavy oil and gold imports and muted exports, increasing India's reliance on volatile capital inflows to fund the shortfall.
Core wholesale price inflation, which strips volatile indexes such as food and fuel prices, eased to around 3.5 percent from 3.8 percent in February, analysts said.
The one-year overnight interest swap ended at 7.31 percent, 2 basis points lower than the previous close of 7.33 percent. It had fallen to 7.29 percent during the day, its lowest since March 17, 2011.
The benchmark five-year swap rate ended at 7.06 percent compared with 7.11 percent on Monday. It had dropped to 7.03 percent earlier in the day, its lowest since Oct. 30, 2012. (Editing by Subhranshu Sahu)