The Australian share market edged lower as easing tensions in the Middle East weighed on oil prices, dragging the energy sector down while investors looked ahead to the upcoming earnings season.

The ASX 200 declined 19 points, or 0.2 per cent, with four sectors finishing in negative territory.

Market sentiment improved after U.S. President Donald Trump called off planned strikes on Iran, raising hopes for fresh negotiations and the potential reopening of the Strait of Hormuz, through which roughly a fifth of global oil supply routinely transits. Consequently, Brent crude fell to approximately US$79 a barrel.

Utilities was the strongest-performing sector, led by a 2.2 per cent gain in Origin Energy, as the stock continued to recover from last month's data breach.

Energy stocks came under pressure as oil prices eased. Woodside fell 1.8 per cent, Santos lost 2 per cent, and the sector dropped 1.4 per cent overall.

Financials, which carry the heaviest weighting in the ASX 200, were also weaker ahead of the reporting season. CBA declined 1.2 per cent, Westpac fell 0.7 per cent, ANZ dropped 0.6 per cent, and NAB eased 0.4 per cent.

Steadfast climbed 4.5 per cent after the KKR-led consortium confirmed it was proceeding with its takeover proposal following due diligence.

FleetPartners surged nearly 16 per cent after receiving a $770 million takeover bid from SG Fleet. IperionX fell 2.7 per cent after announcing plans to redomicile its parent company to Texas and seek a direct Nasdaq listing.

Premier Investments and Temple & Webster also dropped as investors positioned ahead of earnings reports expected to underscore ongoing pressure on consumer spending.