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By Bloomberg

Emerging-market stocks fell toward a two- year low as technology shares slid and speculation grew that the Federal Reserve will raise interest rates as soon as next month. Malaysia’s ringgit sank to the lowest level since 1998.

Largan Precision Co. sank 9.9 percent in Taipei after a report showed weakening sales prospects. Taiwanese equities slumped to a 16-month low. Samsung Electronics Co. dropped 3.6 percent as South Korean shares retreated 0.9 percent. Tenaga Nasional Bhd. fell 3.4 percent in Kuala Lumpur to lead losses for utilities. The ringgit dropped 0.4 percent versus the dollar and Indonesia’s rupiah weakened toward a 1998 low.

The MSCI Emerging Markets Index declined 0.4 percent to 888.41 at 1:09 p.m. in Hong Kong. A report showed the fastest U.S. service-sector growth in a decade, bolstering the case for the Fed to raise the near-zero rates that have buoyed demand for riskier assets. The U.S. reports monthly payrolls Friday that will offer more clues on the rate timing.

“Investors seem to be selling in anticipation of a U.S. rate increase that’s expected to happen next month,” said Dang Tran Hai Dang, a Hanoi-based deputy manager of research at VietinBank Securities JSC. Investors should “reduce equity weightings in emerging markets.”

Traders have never been more convinced of a September rate hike by the Fed. The chances of an interest-rate increase next month reached 52 percent Wednesday, up from just 38 percent just two days earlier.

Stock Valuations

The developing-nation gauge has fallen 7.1 percent this year and trades at 11.2 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has gained 3.2 percent in 2015 and is valued at a multiple of 16.5.

Eight out of 10 industry groups in the emerging-markets measure fell. Largan dropped toward the lowest close since April 14 after the Commercial Times said the company’s sales in August will be little changed from July. Samsung headed for the lowest close since Oct. 28. Tenaga was poised for the lowest close since April 2014, the biggest drag on the FTSE Bursa Malaysia KLCI Index, which declined 1 percent.

The ringgit weakened the most in Asia on concern Malaysia’s foreign-exchange reserves dropped to the lowest level since the 2008 global credit crunch, reducing ammunition to defend the region’s worst-performing currency.

The Shanghai Composite Index retreated for a second day, losing 0.4 percent, amid growing concern unprecedented government intervention will fail to stop a $3.4 trillion rout. Hong Kong’s Hang Seng China Enterprises Index lost 0.2 percent. Equity gauges in the Philippines, Indonesia and Thailand slid at least 0.2 percent.