ASX Large Caps: Local shares buck Wall Street as buyers come back to the market

The ASX had its first positive day of gains in 2023
Tesla could still be overpriced despite a 70% fall – expert
US Fed meeting minutes due out tonight

The ASX recorded its first day of gains for the year as financial and tech stocks led a broad-brushed rally of 1.5%.

The gains defied Wall Street’s movements overnight, but is tracking US and European stock futures in Asian hours.

The Hang Seng gained for the second consecutive day, buoyed by China’s opening up and news that Jack Ma’s Ant Financials had received Chinese government’s approval to raise capital.

Best performing stock on the ASX was lithium play Sayona Mining (ASX:SYA) which gained 7% despite Tesla’s disappointing quarterly reports overnight.

Tesla’s share price plunged 12%, the most since 2020, following a fourth quarter update where it delivered only 405,278 vehicles – well below the median estimate of 431,000 according to analysts surveyed by Refinitiv.

Tesla’s share price has plunged by over 70% in 12 months, but some experts believe it is still overpriced.

“While it is true that Tesla’s share price has been decimated over the last 12 months, falling from highs of US$383 this time last year to US$108 as I write, speculators still have the company trading at a price to earnings (PE) multiple of over 33 times,” says Matt Simpson, Senior Market Analyst at City Index.

“For this price to be justified, traders must consider where the exponential growth that remains priced in will come from.

“For perspective, traditional auto makers do not enjoy these speculative price levels – Toyota trades at a PE multiple of 9 times, and the world’s largest automaker, Volkswagen, trades at just under 5 times.”

“For now, the best chance the stock has for a rally is if Musk were to step aside as CEO of Twitter and regain his focus on Tesla,” added Simpson.

Meanwhile, the European Union has moved to restrict travellers from China by requiring tests as Covid cases in China continue to rise.

Australia’s Fed Treasurer Jim Chalmers warned that China’s plight will cause “substantial impact” on global supply chains.

“As a consequence, that will flow through to the global economy and we won’t be immune from that either,” Chalmers said.

Back to the ASX, Energy was the only sector in the red today following a 3% slump in crude prices overnight.

“Oil prices are tumbling as risk aversion sends the dollar higher, and dampens expectations that the crude demand outlook will improve anytime soon,” said OANDA analyst Edward Moya.

“Crude prices could struggle here as a strong dollar could be here to stay as investors can’t pass up the yield they are getting in fixed income.”

Looking ahead to tonight’s session on Wall Street, investors will be anxiously anticipating the release of Fed minutes of the December 13-14 meeting.

BIG CAP WINNERS

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Security	Description	Last	%	Volume	MktCap
SYA	Sayona Mining Ltd	0.21	10.53	21,816,395	$1,650,290,982
BRN	Brainchip Ltd	0.81	8.05	8,430,147	$1,286,512,297
MFG	Magellan Fin Grp Ltd	9.41	7.91	1,212,767	$1,582,766,180
TLX	Telix Pharmaceutical	7.50	6.92	571,162	$2,217,562,818
SLR	Silver Lake Resource	1.26	6.33	4,886,837	$1,101,747,035
SNZ	Summerset Grp	8.54	5.82	2,354	$1,873,183,335
PNI	Pinnacle Investment	9.15	5.41	226,601	$1,746,972,006
CMM	Capricorn Metals	4.86	5.19	721,833	$1,731,036,269
JDO	Judo Cap Holdings	1.39	5.11	236,295	$1,459,286,231
CUV	Clinuvel Pharmaceut.	22.55	4.88	40,570	$1,062,322,267
RWC	Reliance Worldwide	3.12	4.88	1,848,952	$2,346,581,452
CIA	Champion Iron Ltd	7.67	4.64	1,101,959	$3,791,025,614
BRG	Breville Group Ltd	19.52	4.55	164,066	$2,665,728,085
SQ2	Block	96.51	4.45	277,795	$2,979,833,195
JBH	JB Hi-Fi Limited	43.94	4.37	372,389	$4,602,960,600

Magellan Financial (ASX:MFG) rose 7.5% on no specific news.

Telix Pharma (ASX:TLX) and Brainchip (ASX:BRN) were also beneficiaries of risk-on investor sentiment.

BIG CAP LOSERS

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Security	Description	Last	%	Volume	MktCap
WDS	Woodside Energy	34.53	-2.29	3,155,840	$67,101,816,907
STO	Santos Ltd	6.98	-1.41	5,619,922	$23,458,156,049
YAL	Yancoal Aust Ltd	5.68	-1.39	2,950,253	$7,605,731,157
IPL	Incitec Pivot	3.68	-1.47	4,931,288	$7,244,499,358
NHC	New Hope Corp	5.74	-1.37	4,179,161	$5,133,455,107
VEA	Viva Energy Group	2.61	-2.25	1,041,706	$4,137,538,039
GNE	Genesis Energy Ltd	2.42	-2.02	39,816	$2,611,665,054
BAP	Bapcor Limited	6.38	-1.24	573,760	$2,192,604,750
CEN	Contact Energy Ltd	7.08	-3.67	1,050	$1,839,860,651
SYR	Syrah Resources	1.98	-1.62	1,444,736	$1,347,847,127
LFG	Liberty Fin Group	3.89	-3.23	2	$1,220,472,000
LKE	Lake Resources	0.75	-1.32	6,425,453	$1,050,711,262
OBL	Omni Bridgeway Ltd	3.56	-1.25	128,260	$1,004,736,510