The ASX has fallen back to where it was in the middle of 2021, with local sentiment dented by companies reporting supply chain problems and weather damage. Wall Street produced negative leads over the weekend and the benchmark S&P/ASX 200 dropped 1.2 per cent at the open on Monday.

The index regained strength to close 0.5 per cent lower at 7139.5 points, a six month low.

Mining companies were under heavy pressure despite iron ore prices rising, with gold miner Regis Resources slumping 14.3 per cent to $1.80 after it cut full-year gold production forecasts due to heavy rains damaging an unfinished mine.

Lynas Resources fell 4.7 per cent to a four-week low, and South32 dropped 3.7 per cent after a weak quarterly production report.

Meanwhile, homewares seller Adairs dropped 21.5 per cent on the All Ords after warning first-half earnings would be hit by lockdowns and severe supply chain disruptions. Adairs boss Mark Ronan said total sales for the half were down 0.5 per cent.

AFIC, the country’s largest listed investment company, on Monday said it would pay an interim dividend of 10¢ a share, the same as this time last year, after its portfolio outperformed its ASX benchmark in the latest reporting period. Australian Foundation Investment Company’s profits lifted 73.5 per cent to $146 million due to a jump in its income from dividends, after several blue-chip companies reinstated or raised payouts last year.

Managing director Mark Freeman said the recent decline in share prices had been a “healthy adjustment” triggered by talk of higher interest rates.

“Now the market sees more sensible valuations, I wouldn’t call them cheap yet, not by any stretch,″⁣ he said.

“I think that had to happen and the catalyst for it just happened to be this discussion around interest rate rises, which we were expecting and we probably think is necessary.”

Among information technology stocks, Block Inc (formerly Afterpay) fell 3.6 per cent, Novonix dropped 6.7 per cent, Life360 fell 8.9 per cent, and Computershare dropped 2.4 per cent.

Telco Uniti outperformed the market with gains of 9.3 per cent after telling shareholders it has received multiple take-over offers in recent months, but none were far advanced enough to proceed.

In the financial sector ANZ Bank dropped 1.2 per cent, Westpac fell 0.9 per cent, and NAB fell 0.5 per cent amid talk of net-interest margin squeezes if Australia’s official cash rate remains at record lows. Domestic inflation data was due on Tuesday morning.