US-Iran tensions to drive market sentiment

INVESTORS headed into the new year confident on the back of a broad trade deal between the US and China may be rattled by escalating tensions in the Middle East after a US airstrike killed a top Iranian commander in Baghdad.

The killing of Qasem Soleimani has certainly injected new uncertainties into the market, which until then had been underpinned by renewed optimism about the global economy.

AxiTrader chief Asia market strategist Stephen Innes said: "Iran will surely respond but could fall short of a typical military strike on US hard assets. Teheran needs to have just enough flame to mobilise local nationalist support."