Green light from China data 3:15pm: The recent gold rally may have started to sputter in the past days, but hedge funds and other speculators are making the biggest bet on gold since January. Money managers boosted their net-long position by 34 percent to 97,902 futures and options by August 27, US Commodity Futures Trading Commission data show. Holdings of short contracts tumbled 37 per cent to 32,088, the biggest drop in 11 months. Net-bullish holdings across 18 US- traded commodities climbed 18 per cent to 824,251, the highest since February. The bullishness was driven by fears of military action against Syria, which pushed the precious metal sharply higher last week, but those fears have since eased somewhat. 2:49pm: Engineering firm Transfield Services has appointed board member and former Westpac executive Diane Smith-Gander as its new chairman. Smith-Gander will quit her role as deputy chairman of NBN Co as a result, to avoid any conflict of interest given Transfield's role as a lead contactor on the national broadband network project. She has been a non-executive director at Transfield since 2010, and also currently sits on the board of Coles owner Wesfarmers. 2:31pm: Analysts are tipping Australian shares will enjoy a fillip after the federal election and a better than expected reporting season. A clear result after Saturday's poll is expected to bolster confidence and earnings growth, which has been gradually gathering momentum in past months. Although company earnings were flat on average in the second half of 2012-13, Deutsche Bank equity strategist Tim Baker says that was an improvement from the previous 18 months of decline. "I'm still inclined to think the market has some better times ahead, certainly on the earnings front," says Baker, adding he expects earnings growth in 2013-14 to be in the high single digits. Read more 2:20pm: Etihad is again the suspected buyer of a large block of shares in Virgin Australia. A tranche of 36.75 million shares in Virgin - representing a 1.4 per cent stakes - changed hands this morning at 40 cents a piece. Etihad has regulatory clearance to boost its stake in Australia's second-largest airline to as much as 19.9 per cent. The Middle Eastern airline last increased its stake to 10.55 per cent in late July. Shares in Virgin are up 2.6 per cent at 40 cents. 1:54pm: Traditional bricks-and-mortar retailers, which for a long time refused to believe the hype about online sales, have finally made an inroad into the crucial revenue channel by winning back customers from pure-play operators which have dominated the area. The latest National Australia Bank retail sales survey shows many bricks and mortar shops are successfully evolving into "bricks and clicks" operators, offering customers offline and online shopping. The survey reveals that in the 12 months to July, pure-play retailers, including eBay and Amazon, controlled 70 per cent of online retail sales in Australia, down from 73 per cent at the start of 2010. It also showed that despite a slow start to the year, Australia's online spending rose to $14.1 billion in the year to July, equivalent to 6.3 per cent of traditional retail sales. 1:34pm: The Australian dollar is holding onto its gains following encouraging Chinese data and fading worries about an imminent military strike against Syria. The dollar is buying 89.69 US cents, from around 89.00 US cents. The final HSBC/Markit Purchasing Managers' Index (PMI) for China climbed to 50.1 in August, up sharply from July's 47.7. It came a day after a bullish official manufacturing PMI suggested factory activity grew at the fastest pace in more than a year in August. The dollar was also underpinned by local data showing building approvals jumped 10.8 per cent in July, more than twice the increase forecasted. Home prices in capital cities rose for a third straight month in August. "Building approvals beat expectations easily and China's PMI did the same thing, showing that the soft part of Chinese growth seems to be behind us," says Joseph Capurso, a strategist at Commonwealth Bank of Australia. So the Aussie got a fillip. 1:12pm: Analysis from CommSec shows our top companies are still making money. Excluding index leaders Commonwealth Bank and BHP Billiton, aggregate profits of ASX 200 companies rose 4.8 per cent in 2012-13 compared with the previous year. More companies cut dividends than in 2011-212, but even more lifted dividend, according to the CommSec report, as cash holdings grew 35 per cent to about $105 billion. CommSec chief economist Craig James attributes the increase to companies implementing a range of cost cutting programs as well as boosting productivity. James is predicting better times ahead with the ASX lifting from currently about 5170 points up to 5300 points by the end of the year. The federal election has proved to be a major influence on the Australian economy. Consumers and businesses alike have been reluctant to spend, invest and employ. As a result, the economy has been starved of momentum. But once the election is out of the road, we expect the economy to rebound ... making life easier for corporate executives, and ultimately for their staff. 1:02pm: Gold is extending its losses to a third session, falling over 1 per cent as US President Barack Obama chose to seek Congressional approval before initiating any military action against Syria. Spot gold dropped to a one-week low of $US1379.44 before paring some losses to trade down 0.5 per cent at $US1388.24 an ounce. Gold rose last week to its highest since mid-May as possible military action against Syria prompted safe-haven buying, but gave up some gains after British lawmakers voted against any involvement. "The easing tensions in Syria have caused gold prices to dip," says Barnabas Gan, an analyst at OCBC Bank in Singapore. Our base case scenario is that the Syrian issue will not blow up. We are still bearish on gold," says Gan, who expects prices for the metal to fall to $US1250 by year end. 12:54pm: AMP Capital has become the latest big financial services company to bulk up its Asian presence, forming a new funds management joint venture in China with the country's largest insurer. The financial services giant today said it would take a 15 per cent founding stake in a new business it is establishing, China Life AMP Asset Management. China Life Insurance Group will hold the remaining 85 per cent of the business. The move is an attempt to exploit rapid growth in China's wealth management sector, and a recent rule change that allow China's insurance companies to offer funds management. The new business will aim to sell domestic listed equities and fixed income products to retail and institutional customers in China, AMP said. 12:45pm: It may have been the strongest quarter for real estate since the heady days of 2010, but analysts note there were some signs of a slowdown in August. The national dwelling value rose just 0.5 per cent over the month, thanks primarily to softer conditions in Sydney and Melbourne. ""We've had a really strong June and July but a more moderate August,"" says RP Data analyst Cameron Kusher. ""It's definitely the low interest rates that's driving this activity. ""The thing from here will be what happens in spring. It's looking like a pretty good spring selling season - the amount of stock on the market is fairly low and clearance rates are quite strong."" Louis Christopher, managing director of SQM Research, says the country has seen its strongest winter market in years and it was set to continue for spring. ""I'm still convinced its a very strong market out there, particularly for Sydney."" 12:24pm: Kevin Andrews" last big contribution to Australian public life was when he was Immigration Minister and totally botched the Dr Mohamed Haneef case, defaming and wrongly imprisoning the innocent doctor, writes BusinessDay's Michael Pascoe. The indications are that he intends to pick up in the style with which he left off, this time as Family and Human Services Minister. The current target of Mr Andrews" zeal is the vast bulk of the charity and not-for-profit sector. As Royce Millar very nicely reported yesterday, Andrews seems to have carriage of Cardinal George Pell's desire to scrap the Australian Charities and Not-for-Profits Commission, a body that's actually designed to help the bodies it watches over. The ACNC was set up in December with one Susan Pascoe (no relation) as its inaugural commission. Among those who take these things seriously, the ACNC is considered a healthy improvement for the sector - the result of five major inquiries over more than a decade recommending such a thing. It's something the Labor government seemed to get right. Kevin Andrews, as the shadow minister for families, housing and human services, ran a particularly ill-informed, ideologically-driven and hugely ignored campaign against it, including a waste-of-space filibuster over the legislation. Despite the ACNC's subsequent success, Andrews remains unrepentant and promises an Abbott government will scrap it. 12:14pm: It looks like growth in housing construction is getting stronger but other parts of the economy are still struggling. ""I don't think there is anyone who is doubting that building approvals are trending up, the question is how sustainable is it?"," he said. ""We're reasonably upbeat about what building approvals can do this year. ""The question is will they offset what we're seeing elsewhere, which is a fair bit of weakness."" 12:12pm: Here's yet another sign that investment in property is heating up in the country's largest state - while first-home buyers struggle to get a foot in the door. Mortgage broker AFG today says some 49.5 per cent of its mortgages written in NSW last month were for property investors. "This is the highest level of investor activity the company has ever recorded for any state," AFG says. While investors are being attracted by low rates, first-home buyers have also exited the market as incentives have been cut. AFG has roughly 10 per cent of the mortgage broker market, and its monthly index offers a clue as to what the official figures may show in about six months time. Westpac, originally known as the Bank of NSW, has the largest exposure to the state. 12:02pm: Here's a bit more on the decision by CBA's Ian Saines to resign as head of its institutional business. The fact that he is staying on at CBA until the end of the year suggests there is not yet an agreement for him to leave for a rival bank. Mr Saines, an ex-BT banker, spent 13 years at BT before moving over the CommBank's institutional arm. In the latest annual results the division was one of the strong performers. with 10 per cent annual growth in profits to $1.2 billion. 11:50am: The final HSBC/Markit Purchasing Managers' Index (PMI) climbed to 50.1 in August, up sharply from July's 47.7 and in line with last week's flash reading. The survey came a day after a more bullish official manufacturing PMI, which showed factory activity expanded at the fastest pace in more than a year in August with a jump in new orders. The official PMI, which came in at 51.0 versus expectations for 50.6, is more weighted towards bigger and state-owned firms, which have easier access to credit and the scale to cope better with downturns. But any expectations for a strong rebound may be misplaced. As a PMI reading above 50 indicates growth while one below 50 demarcates contraction, the latest Markit/HSBC data suggests August's expansion was only modest. 11:38am: Company gross operating profits fell 0.8 per cent in the June quarter, official figures show. Forecasts centred on a rise of 0.7 per cent for company gross operating profits in the quarter, a Reuters poll showed. Gross operating profits in current prices and seasonally adjusted terms were down 0.4 per cent in the 12 months to June 2013, the Australian Bureau of Statistics (ABS) said. Estimated business inventories, in seasonally adjusted chain volume terms, rose 0.2 per cent in the June quarter. Economists were expecting that inventories were up 0.1 per cent in the June quarter. The estimate of income from sales by manufacturers in the June quarter, in seasonally adjusted chain volume measures, was up 0.1 per cent. Estimated income from sales by wholesalers in the June quarter in adjusted chain volume measures was up 0.6 per cent. 11:34am: Local councils approved the construction of 14,304 new homes, including houses, townhouses and apartments in multi-unit buildings, in July. Over the year to July, building approvals were up 28.3 per cent, the Australian Bureau of Statistics said today. 11:29am: Iron ore exporter Gindalbie Metals will ask its lenders for extra help to get through the 2014 financial year, after another engineering problem at its Karara iron ore project in Western Australia blew out its budget. The Chinese dominated company confirmed today it would need more working capital than first thought for 2014, and discussions with its Chinese bankers were underway in a bid to find a solution. The extra money is required after Gindalbie identified problems with moisture extraction at its magnetite concentrator. The problem is limiting the productivity of the concentrator, and work to fix it will take about three months. Gindalbie is 35 per cent owned by Chinese steel giant Ansteel, and shares in the company were 1 cent lower at 14 cents in early trading. 11:19am: British telecoms giant Vodafone has agreed to sell its US wireless joint venture stake to partner Verizon in a deal worth STG130 billion ($227.35 billion), The Financial Times reported. Vodafone overnight confirmed that it was in advanced talks with Verizon Communications ""regarding the disposal of Vodafone's US group"," but played down press reports that the deal was complete. A company statement warned there was ""no certainty that an agreement will be reached,"" but said a further announcement would be made ""as soon as practicable"." Verizon's board of directors will meet on Monday to finalise the terms of the agreement that would see Vodafone sell its 45 per cent stake in Verizon Wireless, giving the US fixed-line company full control after 13 years of shared ownership. 11:05am: More on Billabong, the last minute move by Coastal could derail the entire deal, shunting Altamont and Blackstone out of the way and making way for new recapitalisation offers to be considered by Billabong including a rival proposal from thrice-rejected suitors Centerbridge Partners and Oaktree Capital. It is believed that Coastal is a supporter of Centerbridge and Oaktree's spurned debt funding offer to resuscitate Billabong. Centerbridge and Oaktree claim their refinancing deal for Billabong will leave the company with lower debt and give shareholders a better offer in terms of takeover price and their future dilution under a restructured Billabong. 10:51am: The rate of inflation slowed to a crawl in August, leaving the door open for the central bank to stimulate the economy if need be. The TD Securities/Melbourne Institute Monthly Inflation Gauge was 0.1 per cent in August, following a 0.5 per cent rise in July and a flat result in June. The rate for the 12 months to August was 2.1 per cent, down from 2.7 per cent in July. TD Securities head of Asia-Pacific research Annette Beacher said the data shows that inflation is at the low end of the Reserve Bank of Australia's two to three per cent target range. ""The clear signal from this August report is that inflation remains benign,"" she said. 10:40am: Gold declined for a third day as prospects for an attack against Syria receded, and on bets the US Federal Reserve will start to pare stimulus as the economy improves. Silver headed for the longest drop in two months. Spot gold lost as much as 1.6 per cent to $US1,373.38 an ounce, the lowest level since August 23, and was at $US1,382.88. Prices have retreated since reaching a three-month high of $US1,433.83 on August 28 as improving data supported the case for the Fed to start reducing the $US85 billion in monthly asset purchases this month. While the Syrian crisis helped gold post a second monthly gain in August on increased haven demand, prices are down 17 per cent this year. US President Barack Obama said on August 31 that he'll seek approval from Congress before ordering a strike against Syria for its alleged use of chemical weapons against civilians. UK Prime Minister David Cameron lost a parliamentary vote on military action last week. ""Prices drifted lower as risks of an attack on Syria subsided,"" said Lachlan Shaw, an analyst at CBA. ""Prices also declined on expectations that the Federal Reserve will taper stimulus."" 10:23am: Commonwealth Bank said its head of institutional banking and markets, Ian Saines, will leave at the end of 2013 and it will begin a global search to replace him. Saines joined CBA in 2004 and was promoted to head the institutional banking and markets unit in March 2009. CBA did not specify Saines" next role in today's statement. Saines, 51, is the second senior executive to leave CBA since Ian Narev became chief executive in December 2011. Ross McEwan, 56, quit as CBA's head of retail banking in May 2012 to become chief executive of Royal Bank of Scotland August 2. CBA shares have opened 0.4 per cent higher at $73.14. 10:05am: Australian capital city home prices have risen more than five per cent in the past year, with the Sydney and Perth property markets leading the charge. Home prices across the eight state and territory capitals rose 5.3 per cent in the 12 months to August, according to the closely-watched RP Data-Rismark Home Value Index. Perth experienced the biggest increase during the year, with home prices up more than nine per cent, while Sydney's were up seven per cent. Hobart fared the worst, with prices down 1.1 per cent over the year. Sydney was the strongest performer during the past three months, with prices up 5.4 per cent in that period. 9:54am: The former chief executive of Australia's biggest bank says he would consider chairing a review of the country's financial system if he were asked. And what is fundamentally different today is the size of the superannuation 9:43am: Whether Monday is your favourite or least favourite day of the week, a Ross Gittins column is a good way to settle into the working week: Election campaigns have become works of fantasy where, to enter the spirit of things, you have to suspend disbelief. And the greatest unreality this time is Tony Abbott's claim the budget can be returned to surplus in the coming decade while taxes go down, not up. To most people the idea of permanently paying less tax is hugely attractive. And Abbott is promising to abolish the carbon tax and the mining tax, cut the company tax rate by 1.5 percentage points and abandon Labor's plan to end tax concessions for company cars. All this would cost about $28 billion over four years. So what reason is there to doubt he would deliver a lasting reduction in taxes? Simply his promise to get the budget back to surplus - plus the knowledge government spending is set to grow strongly in the next decade. To return to surplus and to do it while avoiding growth in tax collections would require a literally unbelievable degree of spending restraint. 9:37am: Ai Group chief executive Innes Willox said manufacturers are getting a mixed reaction to the falling Australian dollar. ""The fall in the value of the Australian dollar is beginning to be felt, with some businesses reporting improved competitiveness against imports,"" he said. ""However, exports continue to struggle, while the lower dollar is also pushing up average costs for non-labour inputs, many of which are imported. ""The persistence of downwards pressure on selling prices indicates that manufacturers have little ability in these difficult market conditions to pass on these higher costs and take the pressure off their margins."" Activity rose in only three of the eight manufacturing sub-sectors, with food beverage and tobacco products recording the strongest reading. The petroleum, coal, chemical and rubber subsector expanded, while printing and recorded materials also had a gain. Metal products continues to be the weakest sector. 9:24am: Good morning. Welcome to the Markets Live blog for Monday. Contributors: Max Mason, Jens Meyer This blog is not intended as investment advice BusinessDay with agencies