* Banks hit by tighter regulations
* Telco Vocus gets A$3.27 bln bid, shares surge
* Air NZ shares up after Boeing (NYSE:BA) 787 jets order
By Devika Syamnath
May 27 (Reuters) - Australian shares were flat on Monday, as extended losses in financials offset gains enjoyed by miners on the back of robust base metal prices.
Investors were also cautious given persistent Sino-U.S. trade tensions and as they assessed the outcome of European Parliament elections which highlighted the political fragmentation in the 28-country bloc. MKTS/GLOB
The S&P/ASX 200 index .AXJO was 2.5 points higher at 6,458.5 by 0201 GMT, having lost 0.6% on Friday.
"We are still facing issues with trade war and also the EU elections in Europe," said Damian Rooney, director of equity sales at Argonaut.
Market holidays in London and New York also sidelined many investors.
Mining behemoth Rio Tinto (LON:RIO) RIO.AX rose 2% to its highest level in nearly 11 years.
A weaker dollar on Friday helped to drive industrial metals up and iron ore also remained just below a record high. MET/L
Other mining peers such as BHP Group BHP.AX and Fortescue Metals FMG.AX also chalked up gains as much as 1.8% and 2.6%, respectively.
Financial stocks .AXFJ were down for a fourth straight day after Australia's financial regulator on Wednesday warned banks may face stricter external scrutiny and higher capital requirements unless they improved internal oversight. activity was abuzz in Australia's telco landscape, with Vocus Group Ltd VOC.AX receiving a A$3.27 billion ($2.27 billion) takeover offer from a private equity firm, nearly two years after two suitors walked away from the company. shares surged as much as 26% to an over 29-month high on the news. Peers TPG Telecom TPM.AX and Hutchison Telecommunications (Australia) Ltd HTA.AX also rose 1.8% and 8.3%, respectively.
On Friday, TPG Telecom filed a case with an Australian court challenging the anti-trust regulator's move to block its about $10 billion merger with Vodafone 's VOD.L local joint venture. Zealand's benchmark S&P/NZX 50 index .NZ50 was 0.6%, or 62.75 points, lower to 10,159.61, dragged by healthcare stocks such as Fisher & Paykel Healthcare Corporation Ltd FPH.NZ , which slumped 4%.
Air New Zealand Ltd AIR.NZ shares were 0.9% higher. The national carrier said it has ordered eight Boeing Co BA.N 787-10 Dreamliner jets worth $2.7 billion at list prices, beating out rival Airbus SE AIR.PA , which had proposed the A350 for the hotly contested deal. The jets will be powered by General Electric (NYSE:GE) GE.N engines. ($1 = 1.4430 Australian dollars)