- Major markets in Asia were subdued on Friday.
- Iraqi TV reported Friday that an Iranian military commander was killed in a Baghdad airstrike. The move was later confirmed by the Pentagon.
- Shares of oil companies regionally saw gains amid the Middle East tensions.
- Markets in Japan were closed on Friday for a market holiday.
Major markets in Asia were subdued on Friday as investors weighed the impact of an escalation in Middle East tensions.
Mainland Chinese stocks were mixed on the day. The Shanghai composite was slightly lower at about 3,083.79 while the Shenzhen component added 0.17% to 10,656.41. The Shenzhen composite was 0.267% higher at about 1,760.85.
Elsewhere, South Korea's Kospi closed fractionally higher at 2,176.46.
Australia's S&P/ASX 200 rose 0.64% to close at 6,733.50, with all the sectors in positive territory.
Shares of oil companies regionally saw gains amid the Middle East tensions. Australia's Santos added 2.31% while Beach Energy surged 3.17%. Hong Kong-listed shares of PetroChina and CNOOC also soared 3.05% and 1.85%, respectively.
Overall, the MSCI Asia ex-Japan index was 0.12% lower.
Meanwhile, oil prices jumped in the afternoon of Asian trading hours, after Iraqi TV reported Friday that an Iranian military commander was killed in a Baghdad airstrike. The Pentagon later confirmed that he was killed by an U.S. drone strike.
U.S. futures also pointed to losses for the three major indexes at Friday's open. As of 2:00 a.m. ET Friday, Dow Jones Industrial Average futures were 198 points lower, implying an opening drop of 198.80 points for the index at Friday's open. S&P 500 and Nasdaq 100 futures also pointed to opening losses for the two indexes on Friday.
Markets in Japan were closed on Friday for a holiday.
U.S. President Donald Trump said Tuesday he will be signing a first phase trade deal with China on Jan. 15 at the White House. The president also announced that he will be going to Beijing at a later date when phase two talks begin.
"I do think that the market's already expecting the trade deal to go through on Jan. 15th," Tai Hui, chief Asia market strategist at J.P. Morgan Asset Management, told CNBC's "Squawk Box" on Friday.
Looking further ahead, however, Hui said: "Frankly, I think very few if anybody is expecting the phase two to be completed anytime soon."
The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 96.796 after rising from levels below 96.5 yesterday.
— CNBC's Fred Imbert contributed to this report.
Correction: This report was updated to reflect that the Shenzhen composite was 0.267% higher on the day to about 1,760.85.