The rand eased off its best levels in two months and South African stocks sank on Tuesday, taking their lead from other emerging markets where a rally ran out of steam.

But analysts said that Finance Minister Pravin Gordhan's budget speech on Wednesday could ease concerns about a potential ratings downgrade and revive the currency's recent rally.

The rand is nearly 9 percent up on a month ago, and a well received budget could see it extend gains, traders said.

"International rating agencies are going to focus on how Mr Gordhan and his colleagues are going to reduce state spending, increase revenues without killing the already ailing economy in the process, and manage growing debt and deficit levels," analysts at NKC African Economics said in a research note.

Bonds were firmer, shedding 3.5 basis points to 9.16 percent.

South Africa's credit status is hovering on a precipice as ratings agencies Fitch and Standard and Poor's both have South Africa just one notch above sub-investment grade.

The economy, which is barely growing, faces headwinds including power constraints and depressed commodity prices.

Stocks reversed the previous session's gains as global stock markets faded, with the benchmark Top-40 index down 1.7 percent to 42,949 while the wider All-share index shed 1.41 percent to 48,422.

Bucking the trend, shares in Aspen Pharmacare rose 9.4 percent to 289 rand after the drugmaker said it expected its interim earnings to be as much as 23 percent higher.

Trading volumes were below average, with about 229 million shares changing hands, according to preliminary bourse data.