CANADA STOCKS-TSX falls 1% as bond rout knocks sentiment

* TSX down 1.3% * Oil climbs above 2%, gold slips * Financial Corp rises on report co may bid for Hiscox ( HCXLF ) (Updates prices and details throughout) By Tharuniyaa Lakshmi May 15 (Reuters) - Canada's main stock index fell to over one-week lows on Friday, as concerns about high inflation due to the Middle East conflict set off a rout in global bonds market. At 10:17 a.m. ET, the Toronto Stock Exchange's S&P/TSX composite index was down 1.3% at 33,820.26 points and was on track for a weekly loss. Global bond yields surged as signs of economic strain from the Iran war and surging oil prices sparked fears of faster interest rate hikes by global central banks and weaker economic growth. Canada's 10-year government bond yield touched 3.67%, its highest in almost two years. The Bank of Canada kept its key policy rate unchanged at 2.25% in April but investors are currently pricing in two 25 basis point rate hikes by the end of this year, as per LSEG data. "Considering all factors, the TSX has been resilient this year, so a slight selloff is not unexpected as much of the recent volatility is just posturing and the headlines change every day," said Webull Canada CEO Michael Constantino. Investors also tracked U.S. President Donald Trump's departure from China without major breakthroughs on trade or progress in efforts to end the Iran conflict. Heavy-weight mining stocks were down 5%, as gold and silver prices fell after surging Treasury yields and a stronger U.S. dollar dulled its appeal. Americas Gold and Silver ( USAS ), Aya Gold & Silver ( AYA ) , and Wesdome Gold Mines ( WDOFF ) fell 8.1% to 9% and were the top losers on the benchmark index. On the flip side, energy stocks rose 1% as oil prices climbed after comments from Trump and Iran's foreign minister further dented hopes of a deal to end ship attacks and seizures around the Strait of Hormuz. Among others, Financial Corp rose 1.8% after reports that the Canada-based Intact was exploring a potential bid for the British insurer Hiscox ( HCXLF ). Conifex fell 4.3% after the lumber and bioenergy producer's first-quarter revenue fell on reduced operating days. (Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Vijay Kishore)