BUDAPEST/WARSAW: Czech stocks led a decline by Central European assets on Friday, amid concern that British voters will vote to quit the European Union, leaving less financing available for the bloc's poorer members.
Prague's main stock index fell to a new seven-year low and at 1429 GMT it was down 3.3 percent.
Power group CEZ dropped 3.1 percent, tracking a fall by Western European power companies, including RWE and E.ON.
Bank stocks also got a beating in the region. Austrian-based Erste, which has a large weighting in the Prague index, fell by 5.3 percent in Prague.
Warsaw's blue-chip equities index shed 1.6 percent, pulled lower by the stocks of Pekao, down 3.4 percent, and PKO BP, down 2.4 percent.
The Polish government has imposed a heavy tax on banks, and a planned conversion of Swiss franc mortgages to zlotys could impose heavy costs on them.
The zloty fell 0.6 percent against the euro, after gaining to its strongest levels since mid-April two days ago.
"In the coming days, the zloty is unlikely to strengthen because of the approaching date of the UK referendum," BZ WBK analysts said in a note. Britain's vote on its EU membership is set for June 23.
Poland also may face further downgrades in its credit rating, after Standard & Poor's cut its rating in January. S&P's EMEA sovereign chief, Moritz Kraemer, said another downgrade may depend on the actions of Poland's incoming central bank chief, Adam Glapinski.
Poland's parliament confirmed Glapinski's appointment on Friday. He has pledged to defend the bank from political interference.
Central European government bond yields mostly rose. Poland's 10-year bond yield rose by 3 basis points to 3.09 percent. The comparable safe-haven German Bund was bid at a record low 0.012 percent.
Croatia's kuna traded at 7.5385 per euro, after touching three-month lows of 7.57 overnight, as the government's chances of surviving a coalition crisis dwindled.
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