Johannesburg - South African stocks were down on Tuesday with mining companies taking the most points off the index after heavy weight BHP Billiton announced plans to spin off businesses worth an estimated $16 billion (R170 billion) but baulked at a share buyback.

Retailers were also on the back foot, undermined by grocer Shoprite which warned of a continuing squeeze on the country's consumers after posting its slowest profit growth in 15 years, sending its shares to a five-month low.

The Top-40 index fell 0.5 percent to 46,195.61 while the All-share ended 0.4 percent lower at 51,363.37.

BHP Billiton investors who had been expecting a $5 billion share buy back from the mining giant were left disappointed, sending Johannesburg shares of the company 5.5 percent lower to 347.56 rand.

“None of that materialised, so there has been a bit of a sell-off,” Greg Davies, an equities trader at Cratos Capital said of the buyback.

Shoprite's shares shed 5.6 percent to 145.50 rand, heralding more bad news on the consumer front after South Africa's biggest unsecured lender African Bank almost collapsed last week, blaming customers' inability to meet debt repayments.

“The fact that you have had an African Bank collapse and Shoprite earnings down, it's telling you that the local consumer is under pressure,” Davies said.

“You will find that investors are looking for South African listed companies that have offshore earnings,” he said, pointing to mobile phone companies Vodacom and MTN, which were up 2 percent and 1.4 percent respectively.

Trade was fairly robust with 166 million shares trade, according to preliminary bourse statistics. - Reuters