South Africa's rand firmed on Wednesday as the dollar pulled back from a recent rally, but traders said the local unit was likely to tread a narrow range as investors await Friday's credit rating review from Standard & Poor's.
Stocks were led lower by Nampak, which plummeted after scrapping its dividend to conserve cash, and weakened in general on profit-taking after two weeks of mostly gains by the JSE's blue chips.
At 1600 GMT, the rand traded at 15.6090 per dollar, 0.61 percent firmer from its New York close on Tuesday.
"The range for the day is very little. Everybody is waiting for Friday to see what happens with U.S. non-farm payrolls and S&P's rating decision," Treasury One dealer Andre Botha said.
Ratings firm Standard & Poor's was due to review South Africa's credit rating, currently one notch above subinvestment, on Friday.
Meanwhile, the dollar fell on lingering doubts about the likelihood of a June rate hike by the Federal Reserve given recent softness in U.S. economic data.
On the stock market, the benchmark Top-40 index dropped 0.97 percent to 47,510 points, while the All-Share index weakened 0.72 percent to 53,518 points.
The Top-40 had gained nearly 6 percent over the last two weeks resulting in over-stretched technicals, with the 14-day RSI - a momentum indicator tracked by some chartists - showing the main indices are overbought and due for a drop.
"The Top-40 was at a high for the year to date ... a lot of traders and asset managers are looking just to take a little bit of profit off the table over the last couple of days," said Caleo Capital market analyst Lloyd Priestman.
Packaging manufacturer Nampak scrapped its half-year dividend and said it would reduce its property portfolio to cut debt, sending its shares down 13 percent to a three-month low of 17.91 rand.
Further losses in the bourse were curbed by South African clothing retailer Mr Price which climbed 7.91 percent to 199.10 rand, reaching an almost six-month high.
The discount retailer reported a 17.1 percent rise in full-year profit on Tuesday, boosted by thrifty shoppers lured by discount chains during weak economic growth.
Trade volumes were below par, with about 259 million shares changing hands compared with last year's daily average of 280 million shares.
In fixed income, the yield on the benchmark issue due in 2026 added 0.5 basis points to 9.345 percent.