Johannesburg - South African stocks extended losses on Tuesday as a slightly firmer local currency helped reverse the gains made by so-called rand hedges like British American Tobacco.
South African Breweries, to which many investors also fled in the previous session as the rand weakened, unwound over 3% to R374.33.
The rand firmed over 1% on Tuesday - although it is still languishing near a 3-1/2 year low - weighed down by weeks of illegal strikes that have hit the mining sector, a key source of foreign exchange for Africa's biggest economy.
"The stronger rand is causing the rand hedges to come off a little bit, that's why the market is negative," said Malcolm Moller, an equities trader at Vunani Securities.
"Rand hedges" refers to Johannesburg-listed shares of companies that reap the bulk of their revenue outside of South Africa, making them less sensitive to weakness in the currency.
The Top 40 - (Tradeable) [JSE:J200] index shaved off 0.76% to 31 940.31 and the All Share [JSE:J203] index lost 0.73% to 36 070.74.
"The problem with the rand is the strikes we have got in South Africa, if they can solve those over the next two days, then you will see the rand grow stronger and the market will come off more. If not, and the rand goes weaker, you'll see the rand hedges going up again," Moller said.
British American Tobacco lost nearly 4% to R450.59 while Swiss luxury goods maker Richemont lost 1.7% to R53.69.
Some mining firms went against the grain with investors betting the sector had been punished enough by more than two months of illegal strikes that are hurting mineral production.
"It has been over a decade since we have seen resources valued at these levels," said Andrew Dittberner, Senior Investment Manager at Cannon Asset Managers.
"Although the short-term outlook for resources may be clouded by the current labour unrest, the struggling developed world and concerns around a Chinese slowdown, we believe that there are some opportunities opening up for investors in this sector."
Kumba Iron Ore and African Rainbow Resources added over 3% each to R509 and R165.50 respectively. Diversified miner Exxaro was up 2.3% to R162.85.
Ellies racked up 3.8% gains to R7.07 after the maker of power generator and electronic equipment flagged first-half profit would nearly double.
A system error prevented some market participants from receiving price data for part of the trading day.
Only 100 companies gained and another 159 fell as over 113 million shares changed hands.