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UPDATE 1-South Africa's rand slides as dollar rebounds; stocks slip

* Rand slides as dollar rises

* Banks down as anti-trust probe weighs

(Adds latest prices, analyst quote)

JOHANNESBURG, Feb 17 (Reuters) - South Africa's rand retreated on Friday as the dollar gained, following a rally that had lifted the South African currency to a 17-month high. Stocks followed global markets down.

By 1540 GMT, the rand had weakened 0.46 percent to 13.0800 per dollar after closing at 13.0200 overnight in New York.

The dollar index , a gauge of the U.S. currency against a basket of other major currencies, was up 0.4 percent, bolstered by expectations the Federal Reserve will raise interest rates more than once this year .

The rand is expected to remain in the same range before Finance Minister Pravin Gordhan's budget speech on Wednesday. Gordhan is expected to announce new taxes on income, alcohol and tobacco to plug a 28 billion-rand ($2.15 billion) shortfall in revenue.

Bonds also backtracked, with the yield on the benchmark 2026 issue adding 8 basis points to 8.73 percent.

On the stock market, the benchmark Top-40 index was down 0.9 percent to 45,074 points. The broader All-share index fell 0.7 percent to 52,223 points.

Losses were broad-based, with three-quarters of the bourse's blue-chips closing lower.

Drugmaker Aspen Pharmacare was the biggest loser, shedding 2.6 percent to 288.82 rand. The stock had gained 10 percent in the six weeks until Wednesday, but pared gains to 2 percent for the year by Friday's close.

"Some investors were booking profits," said Cratos Capital trader Greg Davies.

Shares in the nation's banks were also down as an anti-trust investigation into alleged collusion by currency traders at more than a dozen institutions weighed on the sector .

"The market initially didn't pay it much attention, but now its seems to be becoming a bigger concern," Davies said.

The banking index was down 1.3 percent at 7,589 points.

(Reporting by Mfuneko Toyana and TJ Strydom, edting by Larry King)

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