BUDAPEST: Polish stocks were headed for their worst weekly drop since March 2014, with copper miner KGHM shedding 4 percent on concern it would have to invest in a fund created to rescue Poland's ailing coal mines.
Commodity-company shares also underperformed on worries about global growth. Polish banks and state-owned companies have plunged this week on concern the autumn parliamentary election will lead to policy measures that could hurt their profits.
The conservative opposition Law and Justice party, which has a lead in opinion polls now, is seen as less business-friendly than the governing Civic Platform.
The Warsaw bourse has underperformed regional stock markets this year, falling 5.4 percent, partly on policies that are seen hurting the financial sector.
Meanwhile, the Budapest stock exchange's main index has gained more than 35 percent this year as the Hungarian government softened its stance on banks after years of heavy windfall taxes.
"There is a broad sell-off in commodity stocks but the local news is also a drag ... Investors are afraid that KGHM will be forced to invest in the coal sector," said Michal Krajczewski, an analyst at BGZ BNP Paribas's equity brokerage in Warsaw.
Most regional currencies were stable, but the Hungarian forint, one of the region's most liquid currencies, rose 0.3 percent by 0751 GMT. It had weakened to more than 311 after the open but later firmed to 309.65, tracking other emerging market currencies.
Akos Kuti, an analyst at brokerage Equilor, said the forint's gains may have been caused by hopes the European Central Bank will maintain its bond-buying programme, after fresh euro zone PMI data signalled business activity was less secure than expected.
"(There are hopes) that the money-pump will continue, this drives regional and emerging currencies," Kuti said.
The Czech crown eased a notch to 27.055 but was still close to an official cap of "close to" 27 against the euro despite comments from a central banker that its gains have become an anti-inflationary factor and could lead to extending the use of the bank's weak crown policy.
The euro was supported at 27.03 crowns on Thursday, a level it got to last week when the central bank stepped into the market for the first time since setting the cap in 2013 to prevent more firming.
The central bank said on Thursday it was standard policy not to comment on whether it was active in the market, but some traders suspected it was.
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