May 5 (Reuters) - The UK's FTSE 100 slid more than 1% on

Tuesday, as traders returned from a bank holiday to witness a

rout in financial stocks driven by HSBC's ( HSBC ) surprise loss and

concerns about the U.S.-Iran conflict.

The blue-chip FTSE 100 dropped 1.4% to 10,219.1

points at the close, clocking its biggest one-day drop since

late March. The midcap FTSE 250 shed 0.4%.

* HSBC's ( HSBC ) shares fell 5.9% after the British bank

reported an unexpected $400 million loss linked to a fraud case,

raising further questions about lenders' private credit

exposure.

* The overall bank index dropped 4.6% to a

near one-month low.

* The broader market was also responding to growing tensions

in the Middle East, with the United Arab Emirates saying it was

under attack from Iranian missiles and drones, even as

Washington said a shaky ceasefire was intact despite an exchange

of fire the previous day.

* Brent crude futures retreated, but held near $110

a barrel, stoking concerns that elevated energy prices would

fuel inflation and force major central banks to maintain a

tighter monetary policy.

* Traders are pricing in two or possibly three interest rate

hikes by the Bank of England by the end of 2026.

* Travel-related stocks fell on concerns about higher fuel

costs. Cruise operator Carnival and British Airways

operator IAG dropped 3.7% and 1.6%, respectively.

* Britain's Intertek ( IKTSF ) jumped almost 6% after the

company said it was reviewing a revised takeover bid from

Swedish private equity group EQT AB.

* Britain's largest broadband and mobile provider, BT Group

, climbed 1.7% after BofA Global Research upgraded the

stock to "buy", citing the potential for a higher dividend

payout.

* Vodafone ( VOD ) dipped 2.2% after the telecoms

company agreed to buy its partner CK Hutchison's ( CKHUF ) stake

in VodafoneThree for 4.3 billion pounds ($5.8 billion).