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By Bloomberg

The selloff in emerging-market assets and commodities deepened, spurring declines in currencies from Russia’s ruble to Australia’s dollar and sending a measure of developing-nation stocks to a four-year low. The pound strengthened after U.K. inflation unexpectedly quickened.

Oil and copper led commodities lower amid speculation the global fuel glut will persist and China’s economy will face further headwinds. Shares in Shanghai dropped the most in three weeks, while prospects for the Federal Reserve to raise interest rates also curbed demand for riskier assets. Thailand’s baht fell to a six-year low after yesterday’s deadly bomb explosion in the capital and Turkey’s lira declined to a record after the central bank kept rates on hold.

“There is a lack of positive catalysts for emerging markets,” Martial Godet, the head of emerging-market equities and derivatives strategy at BNP Paribas SA in Paris, said by e- mail. “Dovish Fed comments and a rate hike in December rather than September could help stabilize the situation, especially on the currency side.”

The MSCI Emerging Markets Index dropped 0.9 percent at 8:39 a.m. in New York. Russia’s ruble weakened for a fourth day and the Aussie retreated against 15 of its 16 major peers. The pound climbed 0.7 percent to $1.5701 and gilts fell. Futures signaled U.S. stocks will fall for the first time in three days. Wal-Mart Stores Inc. declined in early trading after cutting its forecast.

New-home construction in the U.S. climbed in July to the highest level in almost eight years, Commerce Department data showed. Investors will be looking on Wednesday at minutes from the Fed’s last meeting for clues on the timing of the first rate increase since 2006.

Chinese stocks tumbled, with the Shanghai Composite Index losing 6.2 percent as traders reduced stimulus bets and speculated the government will pare back efforts to prop up equities after data showed home prices rose. The Hang Seng China Enterprises Index dropped 1.5 percent, erasing a gain of as much as 1.3 percent.

China Devaluation

The declines come a week after China’s first major devaluation since 1994 surprised global investors and fueled concern authorities are struggling to combat a slowdown in the world’s second-largest economy.

“Since China devalued the currency last week, investors have become more concerned about the growth outlook for emerging markets,” Michael Wang, a London-based strategist at Amiya Capital LLP, who recommends selling emerging-market stocks, said by e-mail. “We need to get the first Fed rate hike out of the way. We also need more evidence that the near-term outlook for China’s economy is stabilizing.”

The lira weakened 0.7 percent to 2.8876 versus the dollar, after reaching 2.8941, after policy makers kept all three rates unchanged. The currency has dropped to all-time lows for the past four days after talks to form a coalition government collapsed.

Saudi Arabian shares fell for a sixth day, with the Tadawul All Share Index 2.5 percent sliding to the lowest since January, after the International Monetary Fund said the drop in oil prices will force spending cuts and curtail economic expansion.

‘Thailand Vulnerable’

Thai stocks dropped the most since January 2014, with the benchmark gauge falling 2.6 percent. The baht slid 0.7 percent to 35.620 versus the dollar in Bangkok. A blast yesterday killed at least 20 people in city’s central shopping district, putting the nation’s tourism industry at risk.

“Thailand is vulnerable right now, as economic growth and corporate earnings are weak,” said Andrew Stotz, chief executive officer of Bangkok-based A. Stotz Investment Research and former head of research for Thailand at CLSA Ltd.

The Bloomberg Commodity Index fell 0.6 percent to the lowest since February 2002. The gauge of 22 raw materials declined for a sixth day in the longest run of losses in more than a year.

Commodities Fall

Oil traded near the lowest in six years in New York on speculation the global glut that drove prices into a bear market will be prolonged. West Texas Intermediate crude oil slipped 0.8 percent to $41.55 a barrel.

Copper dropped as much as 2.3 percent to the lowest price since 2009. Aluminum also reached a six-year low, while lead, nickel and zinc retreated.

Gold for immediate delivery was little changed at $1,118.78 an ounce. Silver fell 0.8 percent to $15.2125 an ounce.

Sterling strengthened against all 31 of its major peers as the Office for National Statistics said annual inflation quickened to 0.1 percent in July. The yield on 10-year gilts jumped five basis points to 1.86 percent.

Futures on the Standard & Poor’s 500 Index fell 0.3 percent. Wal-Mart fell 2.7 percent after the world’s biggest retailer posted second-quarter earnings that missed analysts’ estimates.

European Stocks

The Stoxx Europe 600 Index was little changed, with gains in technology and health-care stocks offsetting declines in basis-resources and energy producers.

John Wood Group Plc fell 1 percent after the oil-services contractor said conditions remain challenging. German utility RWE AG lost 3.1 percent after Societe Generale SA recommended selling the stock.

Wirecard AG jumped 6.1 percent after reporting an increase in profit. Jyske Bank A/S advanced 3.8 percent after saying earnings were better than expected.

The cost of insuring corporate debt held near the highest in about five weeks. The Markit iTraxx Europe Index, which tracks credit-default swaps on investment-grade companies, was little changed at 67 basis points. The sub-investment grade Markit iTraxx Europe Crossover Index was little changed at 311 basis points.