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DAVID Cameron told the UK Parliament that yesterday’s military action by coalition forces had destroyed almost all of Libya’s air defences, paving the way for an effective no-fly zone. Russia and China criticised the bombings in Libya yesterday, but the head of the 22-nation Arab League, Amr Moussa, insisted that the group respects the UN resolution despite reports of dissent.

ELSEWHERE in the Arab world, EGYPT’S stock market will reopen following a 7-week closure tomorrow, after a vote saw 77% of Egyptians back pro-democracy amendments to its constitution. In SAUDI ARABIA demonstrators gathered in support of King Abdullah, diffusing the threat of violence. In YEMEN seven ambassadors and 18 senior military staff defected to the opposition yesterday as the government vowed to use the army to prevent a coup. In BAHRAIN, 95 people have gone missing since a government crackdown, and King Hamad bin Isa al-Khalifa said a foreign plot to end his reign has failed. ISRAEL has been hit by more than 50 rockets launched from Palestine this week, and has retaliated with strikes into Gaza.

SALES of previously owned US homes fell sharply in February and prices touched their lowest level in nearly nine years, indicating that a US housing market recovery is still a long way off. In the UK, however, a monthly survey by property website Rightmove, revealed that asking prices for houses in England and Wales are 0.9% higher than this time last year.

MARKETS:

ASIAN stocks climbed for a third day, led by the Nikkei, which had its steepest two-day rally since April 2009, having fallen last week to its lowest level ion two years. The wider MSCI Asia Pacific Index gained more than 2%, with about three stocks rising for each one that fell.

EUROPEAN shares are expected to edge lower today as investors take a breather after gains in the previous three sessions, with the situation in Japan and Libya seen prompting market players to trade cautiously.

CURRENCIES:

THE YEN was within 0.4% of a two-week low against the euro as Asian stocks rose and progress in restoring a Japanese nuclear plant’s cooling systems reduced demand for the currency as a refuge. The EURO was 0.1% from its strongest in four months against the dollar as the ECB is expected to reiterate its willingness to raise interest rates next month.

ENERGY:

OIL traded near its highest level in more than a week overnight, as Allied airstrikes in HYPERLINK “http://topics.bloomberg.com/libya/”Libya threatened to prolong a supply disruption from Africa’s third-largest crude producer and as protests intensified in HYPERLINK “http://topics.bloomberg.com/yemen/”Yemen. The tension in the Middle East and North Africa is adding a risk premium of $15 to $20 a barrel to Brent oil prices, Societe Generale SA said in a report yesterday.

COMMODITIES:

GOLD, which advanced for a fifth day, may hold the key to financing Qaddafi’s struggle, as the government-controlled Libyan central bank holds at least 143.8 tonnes of gold in the country itself. These reserves, amongst the top 25 in the world, and worth about $6.5bn, are enough to finance a small army of mercenaries for months or even years.

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