The S&P/ASX200 rose one point, or 0.01 per cent, to 8,548.4, as the broader All Ordinaries gained 4.4 points, or 0.05 per cent, to 8,775.
Five of 11 local sectors traded higher on Monday, led by a 5.4 per cent rally in energy stocks after crude prices rallied to three-month highs amid escalating attacks between Israel and Iran.
The bourse's flat performance could broadly be taken as a win, given the context, Pepperstone head of research Chris Weston said.
"The market is just trying to understand exactly what this means in terms of oil supply, and whether there is going to be a disruption for inflation forces," he told AAP.
"At the moment, it's all very contained into Iran's facilities, their infrastructure that supplies the domestic market and there hasn't necessarily been much of an impact on exports, but that could change."
Oil prices surged more than 10 per cent on Friday to above $US76 a barrel after Israel's first air strikes on Iran, but that number eased on Monday to $US73.65 a barrel, still its highest level since the beginning of April.
The rally in energy stocks was also helped by a nearly 11 per cent boost to Santos' share price, after its board gave the nod to a $30 billion takeover by an Abu Dhabi-led consortium alongside private equity giant Carlyle.
Nuclear energy play Paladin was the top-200's best performer, rocketing 15.7 per cent higher on the back of optimistic demand for uranium.
The financial sector finished the day 0.2 per cent weaker as the big four banks traded mostly flat, with the exception of Westpac, which lost 0.5 per cent to $33.19 and NAB, which rose 0.2 per cent to $38.94.
Materials stocks faded 0.9 per cent after lethargic performances from large cap miners and as gold retreated from within striking distance of all-time highs after spiking following Friday's air strikes.
Gold is trading at $US3,435 ($A5,290) an ounce, roughly two per cent short of its all-time peak of $US3,500 reached in April.
Australia's biggest gold miners Northern Star and Evolution Mining were the worst performing gold stocks, after UBS downgraded the pair to 'neutral' and 'sell' respectively and cut its price targets for both.
The tech sector performed well despite Monday's risk-off overtones, pushing 0.9 per cent higher, tracking with a more than one per cent push by Nasdaq futures over the session.
Indexes in Asia also performed better-than-expected, with Hong Kong's Hang Seng up 0.5 per cent, Japan's Nikkei pushing 1.3 per cent higher and the Korea Composite rallying 1.8 per cent.
Mixed economic data from China showed better-than-expected but ultimately subsidised retail sales in May, while 23 months of consecutive falls in new home prices indicated clouds still loom large over China's lumbering property market.
The Australian dollar is buying 65.06 US cents, reclaiming some ground since Friday afternoon when it slipped to 64.76 US cents after Israel's first air strikes on Iran.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Monday one point higher, or up 0.01 per cent, to 8,548.1
* The broader All Ordinaries gained 4.4 points, or 0.05 per cent, to 8,775
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.06 US cents, from 64.76 US cents on Friday at 5pm
* 93.82 Japanese yen, from 92.99 Japanese yen
* 56.21 Euro cents, from 56.10 Euro cents
* 47.87 British pence, from 47.83 pence
* 107.88 NZ cents, from 107.67 NZ cents
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