JOHANNESBURG, May 20 (Reuters) - South African markets fell on Tuesday, with stocks giving up recent gains on profit-taking, while the rand and government bonds were hit in part by violent attacks on foreigners.
Most mining stocks fell, led by BHP Billiton's <BILJ.J> 2.98 percent fall, helping drag the blue chip Top-40 index down nearly one percent.
South Africa's blue chip Top-40 index <.JTOPI> closed 0.72 percent down at 30,986.27 points while the broader All-Share index <.JALSH> fell 0.7 percent to 32,958.55 points.
Heavyweights BHP Billiton dropped to 309.08 rand and Anglo American <AMSJ.J> lost 1.95 percent to 527 rand, while Angloplat <AMSJ.J> ended 2.05 percent lower at 1,430.00 rand.
"There is no news out on these stocks at the moment ... (but) it's not unusual to see profit taking of this nature at the moment. BHP Billiton still at a fantastic share note price," said Ferdi Heyneke, a portfolio manager at Afrifocus Securities.
The rand <ZAR=D3> weakened sharply after strong gains over the past few days and as attacks on foreigners continued, spooking investors and damaging the country's image abroad.
The local currency was trading at 7.65 to the dollar at 1550 GMT, 1.3 percent softer than its close in New York on Monday, but off the session trough of 7.6820.
It started losing ground after the Johannesburg session closed on Monday following a test of Friday's 11-week high of 7.46.
"It is not being helped at all by the images shown around the world but we were due a bounce (after going stronger than 7.50)," Rand Merchant Bank trader Jim Bryson said.
"It is more technical but I don't think the xenophobia attacks helped ... they probably compounded each other."
Should the attacks continue, the rand could be in "trouble" with a break of 7.72 key, he said.
BURNING SHACKS
Police fired rubber bullets at hundreds of shantytown residents in a crackdown on violence against foreigners which has killed at least 24 people in recent days.
Thousands of foreigners, mostly from Zimbabwe, Mozambique and Malawi, have fled into refugee shelters since the violence began on May 11.
Angry mobs, who claim migrant workers are stealing jobs from South African, have burnt and stabbed victims and set fire to shacks.
On international markets, the dollar fell as weaker-than-expected U.S. inflation data added to concerns about the economy's strength and raised doubt about whether the Federal Reserve will be able to hike interest rates this year.
The euro was last trading at 1.5674 to the dollar, about one percent stronger on the day.
The knock to local sentiment also impacted government bonds, already under pressure from strong inflation and expected interest rates hikes.
The benchmark 2015 <ZAR157=> yield was up 6.5 basis points at 9.515 percent compared to Monday's close, while the short-dated 2010 <ZAR153=> yield jumped 9 basis points to 10.56 percent.
The yield on the 2036 <ZAR209=> bond was up 5.5 basis points at 9.125 percent.
Gainers on the bourse included construction group Aveng <AEGJ.J> which added to Monday's gains, jumping 2.38 percent to 64.50 rand on the back of big construction spending ahead of the 2010 Soccer World Cup, to be hosted by the country.
MTN Group <MTNJ.J> had another good day, gaining 1.61 percent to 159.75 rand.
Shares in Sasol <SOLJ.J>, the world's biggest maker of motor oil from coal, closed 1.82 percent higher to 503 rand.
"It (Sasol) continues to run on the back of the oil price, and the rand is also weak," said Heyneke. (Reporting by Gordon Bell, Gugulakhe Lourie and Phakamisa Ndzamela; Editing by Ron Askew)
