Emerging Stock Rally Evaporates as China Growth Concern Returns

The biggest rally in emerging-market stocks in a month faded as Chinese housing-market data stoked concern that a slowdown in the world’s second-largest economy will damp global growth and Federal Reserve meeting minutes stressed the potential for a December increase in U.S. interest rates.

Shares in Shanghai dropped to a two-week low after President Xi Jinping indicated China faced downside economic risks and data showed a recovery in home prices slowed. The Colombian peso and Indian rupee declined as minutes from the Fed’s last policy meeting included language saying “it may well become appropriate” to raise the benchmark lending rate in December, a move that is expected to lure money away from riskier assets as the dollar strengthens.