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The JSE. Photo: Simphiwe Mbokazi.

South African stocks ended 0.29 percent lower on Tuesday, undermined by investors banking profits for resource companies such as Anglo American.

Telkom declined 2.7 percent to 27.45 rand after the competition regulator asked that the fixed-line operator be fined 3.5 billion rand ($454 million) for excessive pricing dating back to 2004.

The Competition Tribunal, which adjudicates on such complaints, is currently hearing arguments from both Telkom and the Competition Commission, South Africa's anti-trust regulator.

“We've never liked Telkom. It's been very, very disappointing. I don't think they can get their model right just yet. Maybe there might be a buying opportunity later on,” said Michael Carlsson, a trader at Consilium Capital.

“They've got big competition with technology coming forward. They are too late in terms of catching up with the MTNs and Vodacoms,” he said, referring to rival mobile phone operators.

Telkom said the fine would be “catastrophic” and could jeopardise its business. Shares in rival Vodacom gained more than 2 percent to 103.50 rand.

The Top-40 index lost 0.29 percent to 30,442.16, mirroring a 0.28 percent drop by the All-Share to 34,112.44.

Johannesburg-traded shares of global miner Anglo American retreated 1.95 percent to 335.60 rand, giving up some of their 3 percent rise from the previous session.

On the gainers side, papermaker Mondi jumped 3.7 percent to 67.43 rand after flagging a probable 53 percent jump in full-year earnings.

News that an arbitration court's ruling had cleared the way for Mondi's Polish unit to acquire local energy company also cheered stock-holders.

Trade volume was thin, with preliminary data showing 190 million shares changing hands, well below the average 256 million shares that traded daily in 2011.

Decliners outnumbered advancers 137 to 128, while 84 shares were unchanged. - Reuters