May 21, 2018 / 3:10 AM / 10 months ago

Australian shares flat on weak banks, Santos jumps on M&A; NZ down

* Investors eye U.S.-China trade talks

* Santos M&A supports energy sector

* CSL pushes healthcare stocks to record high

* NZ falls on consumer staples

By Aditya Soni

May 21 (Reuters) - Australian shares were largely flat on Monday as losses in material and banking stocks undercut positive sentiment stemming from easing U.S.-China trade tensions, though M&A news buoyed Santos Ltd and underpinned the energy sector.

The S&P/ASX 200 index fell a modest 8.10 points, or 0.08 percent, to 6,079.30 by 0257 GMT. The benchmark declined 0.1 percent on Friday.

Christopher Conway, head of research and trading at Australian Stock Report, said investors were “sitting on their hands”, awaiting more details on news that the United States was putting a trade war with China “on hold” for now.

Banks appeared to take the lead from Wall Street after U.S. financials posted their biggest one-day loss in nearly three weeks on Friday.

Westpac Banking Corp slipped 0.8 percent, while National Australia Bank Ltd fell 0.9 percent.

Materials stocks were also under the cosh, hurt by lower iron ore prices.

Global miner BHP dipped 0.6 percent, while Rio Tinto Ltd dropped 1.2 percent.

Energy stocks were among the top gainers, boosted by higher oil prices and positive sentiment emanating from a takeover bid for oil and gas producer Santos Ltd.

Santos received an improved $10.84 billion offer from U.S.-based suitor Harbour Energy, a proposal that comes at a time when oil prices are at their highest since late 2014. Shares of the Adelaide-based company rose as much as 3.4 percent to a near three-year high.

Riding the flurry of positive news in the sector, Woodside Petroleum Ltd firmed about 0.4 percent, while Beach Energy Ltd rose 1 percent.

Elsewhere, CSL Ltd rose 1.6 percent to its highest level, leading the Australian healthcare index to a record high.

An upgraded profit outlook had sent CSL shares surging on Friday, helping it become one of the country’s five biggest firms by market value.

Adding to gains on the benchmark, phone company Vocus Group Ltd traded 6.8 percent higher after naming Kevin Russell as its group managing director & chief executive officer.

Across the Tasman sea, New Zealand’s benchmark S&P/NZX 50 index fell 0.4 percent or 35.85 points to 8,621.48.

Consumer staples accounted for nearly half the losses, with dairy firm a2 Milk Company Ltd sliding about 2.7 percent.

Health products company Comvita Ltd slumped as much as 9.9 percent to its lowest in nine-months following announcement that talks with an unnamed third party for a possible takeover of the company have ended without a deal due to a “considerable distance” on price. (Reporting by Aditya Soni in Bengaluru Editing by Shri Navaratnam)

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