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May 5 (Reuters) - The UK's FTSE 100 slid 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 fell 1.04% by 1027 GMT, while

the midcap FTSE 250 edged up 0.1% after the early May

bank holiday on Monday.

* HSBC's ( HSBC ) shares fell 5.8% 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 3.6% to a

near one-month low.

* The broader market was also responding to growing tensions

in the Middle East, with the U.S. and Iran exchanging fire in

the Gulf as they wrestle for control of the Strait of Hormuz.

* Brent crude futures retreated, but held near $114

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 5.1% and 1%, respectively.

* Britain's Intertek ( IKTSF ) jumped almost 7% 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 4% after BofA Global Research upgraded the stock

to "buy," citing potential for higher dividend payout.

* Vodafone ( VOD ) dipped 0.8% after the telecoms

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

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

* Clean energy technology developer Ceres Power Holdings ( CPWHF )

jumped 8.5% after Goldman Sachs raised its price target

to 930 pence from 670 pence.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shinjini

Ganguli)