Australia shares held a soft tone on Monday, as mining firms and financials eased while investors digested the drop in U.S. markets amid escalating U.S.-China trade tensions.
The major U.S. indices dropped between 2.2 percent and 2.3 percent on Friday after U.S. President Donald Trump threatened to slap $100 billion more in tariffs on Chinese imports. [.N]
However, E-Mini futures for the S&P 500 <ESc1> on Monday were up 0.5 percent, while NASDAQ futures <NQc1> rose 0.7 percent.
"I think local investors were a bit surprised at the depth of the sell-off from Friday night in the U.S.," said Michael McCarthy, chief marketing strategist at CMC Markets.
He added the announcement of an extra $100 billion in sanctions was a negative for markets and the sell-off was a response to uncertainty.
The S&P/ASX 200 index <.AXJO> slipped 0.1 percent, or 4.1 points, to 5,784.6 by 0226 GMT. It was little changed on Friday.
Financials and materials were the biggest weights on the benchmark with mining major BHP <BHP.AX> the main index's biggest drag, down as much as 0.9 percent. Rival Rio Tinto <RIO.AX> lost as much as 1.3 percent to touch its lowest since Dec. 20.
Among financials, National Australia Bank <NAB.AX> and fellow lender Australia and New Zealand Banking Group Ltd <ANZ.AX> were down 0.6 percent and 0.4 percent, respectively, as the sector index <.AXFJ> slipped 0.2 percent.
On Monday, mining infrastructure group Mineral Resources Ltd <MIN.AX> said it agreed to buy iron ore miner Atlas Iron <AGO.AX> via a scheme of arrangement, valuing Atlas at $215.2 million.
After the deal was announced, Atlas Iron's shares zoomed as much as 47.4 percent higher while those of Mineral Resources lost as much as 4.2 percent.
"There is also a bid on the table for Santos, Beach Petroleum also under bid, so this is something we are certainly looking out for in current markets...it does show potential for improved valuation," said CMC Markets' McCarthy.
McCarthy added that Atlas' small market cap meant the deal was not a significant play overall but added to the resource sector theme of smaller companies being vulnerable to takeovers.
New Zealand's benchmark S&P/NZX 50 index <.NZ50> fell 0.1 percent, or 5.83 points, to 8,387.44, hurt by weakness in consumer staples and utilities.
a2 Milk Company Ltd <ATM.NZ> lost as much as 3.4 percent while Contact Energy Ltd <CEN.NZ> was up to 0.8 percent lower.
(Reporting by Aaron Saldanha in Bengaluru; Editing by Jacqueline Wong)
