* Materials firms, financials weigh on Aussie benchmark
* Mineral Resources to buy Atlas Iron for $215.2 million
* NAB, ANZ drag on Australian financial index
By Aaron Saldanha
April 9 - 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 (LON:RIO) 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. 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.