The S&P/ASX 200 index fell 0.1% to 8,801 points on Monday, extending a losing streak that has now spanned four consecutive trading sessions.
The decline was driven by a resurgence of geopolitical anxiety in the Middle East, which sent oil prices sharply higher and dampened risk appetite across Australian equities.
Brent crude climbed in the session as investors reassessed the likelihood of a diplomatic resolution between the US and Iran.
The shift in sentiment triggered a broad-based repricing of energy risk, with the mining and banking sectors leading the decline in Sydney.
These sectors have been particularly sensitive to the volatility surrounding Middle East stability.
The market move comes as confidence in a potential peace agreement wanes, reigniting concerns over supply chain disruptions and energy costs.