Local stocks have started the trading week on a relatively steady note, following a flat offshore lead on Friday and mixed commodity prices.

Mining stocks are showing the most strength, with the S&P/ASX 200 Materials Index up 0.5pct at lunchtime in the East. Rio Tinto (RIO) has held takeover talks with coking coal miner Riversdale (RIV), believed to value the African based miner at $3.5 billion, or $15 per share. It’s believed RIV has labelled the bid too low. RIV shares are up 12.1pct to $15.81 at lunchtime while RIO is firmer by 0.3pct to $86.65. BHP Billiton (BHP) has gained 0.3pct to $44.74.

Financial stocks are lower, with the big four trading down 0.5-1pct. Shares in the NAB (NAB) are worst out of the big four, down 1pct to $23.70.

Healthcare stocks have also come under pressure after US drug giant Pfizer announced revisions to the way it distributes medicines. Sigma Pharmaceutical (SIP) has fallen 11.2pct to $0.435 after also delivering a trading downgrade, while Australian Pharmaceutical Industries (API) is off 8.9pct to $0.46.

The TD Securities-Melbourne Institute monthly inflation gauge has been released today, showing a 0.4pct rise in November. Contributing most to the overall change was price rises for fruit and vegetables.

The Australian dollar has gained strength across the board and at 11.20am AEDT is worth US99.06c, £0.6285 and €73.99c.