PFC,REC shares fall on S038;P outlook

Shares in state-run lenders Power Finance Corp Ltd PFC and Rural Electrification Corp were trading lower after rating agency Standard amp; Poor8217;s cut their rating outlook in line with the cut in the sovereign8217;s outlook.

The benchmark 10 year bond yield rose to as much as 8.65 per cent after the Samp;P move and is biased up,potentially raising borrowing costs for the lenders.

We view PFC8217;s link to the government as very strong and its role as critical,Samp;P said in its release.

At 2:50 pm,PFC was down 5 per cent at 174.75 rupees and REC was 1.9 per cent lower at 213 rupees.