Across Asia, regional markets are mixed following the modestly weaker US leads from Friday and general concerns that growth globally is slowing. The Nikkei 225 and the Kospi are firmer by 0.7% and 0.2% respectively. On the downside, the Shanghai Composite and Hang Seng are 0.2% and 0.3% softer respectively.

In Australia, the ASX 200 finished 0.4% lower at 4222.1 having oscillated around the flat line for much of the day. With modestly weak US leads and few catalysts to buy into stocks before the US returns from its Independence Day long weekend, trading was subdued. Gains among energy names were offset by losses in the financial and industrial sectors.

It certainly looks like PM Gillard's new MRRT has turned the 'takeover' tap back on, as evidenced by this morning's takeover bid from Banpu for Centennial Coal of $6.20 per share. At a 40% premium to the last traded price, this looks to be a significant windfall for Centennial shareholders and will likely reignite M&A speculation across the sector.

The certainty brought about by the new MRRT has facilitated this latest bid and will likely see further foreign capital invested in Australian mining and energy assets. However, despite the increased certainty, there's still a lot of scepticism about whether or not the domestic market can hold up against the global concerns.

There's no doubt the outlook for global growth as deteriorated in recent months. The upcoming second quarter reporting season in the US will be crucial in determining whether or not these fears are overdone. We've seen more downgrades to expectations than upgrades recently so we're probably looking at a market that has priced a lot of the negativity in. It's also the first time in a while that the market has declined ahead of an earnings season, meaning the earnings 'bar' won't be set as high.

Whilst the headline results will be scrutinised closely, outlook statements will be particularly important.

Turning our attention to the individual sectors and it was the industrials space that detracted the most points, falling 1.2%. Heavyweights Brambles, Qantas and Leighton Holdings were among the worst performers, all down between 1.6% and 2.3%.

On a brighter note, CSR was the biggest gainer, adding 3.5% after announcing it had agreed to sell Sucrogen, its sugar and renewable energies business, to Singaporean based Wilmar International, an Asian agribusiness giant, for $1.75 billion. CSR said the deal should bring in $1.6 billion - around $1.06/share - and that the group is evaluating capital management options and will review strategic opportunities over the next few months. The deal came after China's state-owned Bright Food lobbed a conditional $1.75 billion offer in April. A person familiar with the situation said CSR agreed to the Wilmar deal because it was higher in value than what Bright Food was willing to pay as well as more certain; press reports speculated Bright Food was planning to lower its offer to $1.65 billion.

Consumer staples giants Wesfarmers and Woolworths dragged the sector to a 1.1% loss. They fell 1.6% and 1% respectively while both Goodman Fielder and Coca-Cola Amatil slid more than 0.9%.

The financial sector (-0.6%) did most of the damage late in the day after Bank of Queensland COO said funding conditions for Australian banks aren't getting any easier, and that competition for retail deposits is fierce. This potentially could see the big four banks lifting mortgage rates outside of what the RBA does. Suncorp-Metway was the worst performer, down 2.5% while the big four banks were mixed. NAB and Westpac were down more than 0.8% while ANZ and CBA both managed gains of 0.1%.

The material sector finished marginally lower, down 0.2%. Fortescue Metals topped the decliners, losing 1% while diversified miners Rio Tinto and BHP lost 0.1% and 0.3% respectively. On a positive note, gold miners Lihir and Newcrest bucked the broader trend, rising more than 0.2% on a higher gold price.

In a report from Citigroup, it said changes to Australia's proposed new mining tax have made it much less damaging for miners, although junior iron ore and coal stocks are still losers. Citi believes the impact of the reworked tax on the net present value of BHP Billiton and Rio Tinto is between 1% - 3% whereas the original proposal resulted in a 12% hit. The broker continued, saying for coal producers the impact falls to between 5% - 8% from 15% - 20%. For Fortescue Metals it drops to about 2% from 25%. The broker sees the biggest winners being gold and base metals producers and Energy Resources of Australia, which are all now excluded from the reworked tax. Losers are iron ore and coal juniors still in the ramp up phase and exploration focused companies which have lost the exploration rebate.

On the upside, the energy sector was the big gainer, rising 0.9%. Centennial Coal was the star, jumping 32% after recommending a takeover offer from Banpu.

Banpu became the first bidder to launch a deal in the post-Resource Super Profits Tax era in Australia, with its $6.20 per share bid valuing Centennial Coal at $2.45 billion. The bid represented a 40.3% premium to Friday's closing price and a 55% premium to the share price before the Thai group unveiled its stake on May 5. Banpu gave a signal of intent last week when it said media reports suggesting it didn't plan to raise its 19.9% stake shouldn't be relied on. With the uncertainty of the RSPT resolved last week and a watered down tax plan set to have much less impact on Centennial, Banpu acted quickly, although those close to the deal said it was well in train regardless of the tax outcome. The bid has been recommended by Centennial, although Foreign Investment Review Board (FIRB) approval will be key. Banpu will likely need to convince FIRB that it will continue to supply the domestic power-generation market. Those close to Banpu said it supports Centennial's strategy of targeting 50% domestic sales and 50% export by 2015.

Elsewhere, the interest in Centennial boosted other coal stocks with the likes of Macarthur and Whitehaven Coal rising 5.2% and 5.1% respectively.

Ben Potter Research Analyst

IG Markets - CFD trading