March 2 (Bloomberg) -- Hungary’s forint dropped the most in a month, leading Eastern European currencies lower, and stocks fell after the European Union rejected calls to back an aid package for the region.

The forint weakened 2.7 percent after EU leaders yesterday vetoed an appeal by Hungary for 180 billion euros ($228 billion) of loans for eastern European countries. Their currencies have tumbled this year as worries about the region’s economic region amid the global financial crisis have spread.

“Markets are somewhat disappointed, taking the lack of news from the EU as an indication that the EU may not have grasped the magnitude of the problem yet,” said Christian Keller, a foreign- exchange strategist in London at Barclays Capital. “We cautioned our investors on Friday not to position for a sustained recovery” in the region’s currencies even if a package had been approved.

The Hungarian forint dropped as much as 2.7 percent to 307.41 per euro, the most since Jan. 30, and traded at 306.17 at 11:21 a.m. in Budapest. The Polish zloty declined to 4.7460 versus the euro, from 4.6460 on Feb. 27, and the koruna depreciated 0.9 percent to 28.360 against Europe’s common currency.

The Hungarian plan was not supported by all the other countries in the region, including the Czech Republic and Poland, who say their economies are sound and don’t need aid.

“The market is disappointed that no aid package was announced,” said Martin Blum, head of emerging-market economics and currency strategy at UniCredit SpA in Vienna.

Debt Burdens

Investors are exiting eastern Europe on concern higher debt levels and dwindling exports make the economies among the most vulnerable to the global credit crisis. Hungary was the first EU country to be bailed out last year with a 20 billion-euro ($25 billion) loan from the International Monetary Fund, EU and World Bank.

The zloty pared some of its losses after a report showed Poland’s economy expanded 2.9 percent in the fourth quarter, more than the 2.8 percent estimated by economists in a Bloomberg survey.

Shares in the region also retreated, as Warsaw’s benchmark WIG20 Index slid as much as 2.6 percent and was 0.1 percent lower at 1,370.79. The drop was led by financial stocks as a weakening zloty deepened concerns that provisions linked to currency options and foreign-currency mortgages may swell.

Bank Zachodni WBK SA slumped 4.2 percent to 67.55 zloty after the Polish unit of Allied Irish Banks Plc reported fourth- quarter earnings that missed analysts’ estimates due to higher provisions.

Handlowy Drops

Bank Handlowy SA, controlled by Citigroup Inc., declined 2.7 percent to 33.1 zloty after the Polish lender wrote off an additional 89 million zloty ($24.3 million) from its 2008 net profit due to currency-option transactions.

Hungary’s BUX Index fell 1 percent to 10,084.06 as OTP Bank Nyrt., the country’s largest lender, slid 8 percent to 1,476 forint after Morgan Stanley cut its share-price estimate 42 percent to 1,500 forint.

The Czech PX Index retreated 1.4 percent to 631.90.

The Romanian leu slipped 0.1 percent to 4.3079 per euro and the Turkish lira dropped 1.5 percent to 1.7255 per dollar.

To contact the reporter on this story: Yon Pulkrabek in Prague on ypulkrabek@bloomberg.net

Last Updated: March 2, 2009 05:25 EST