Markets, Business & Tech Briefing: PSI Falls 0.9% as EDP Renewables Sinks Despite Doubling Profit

Portuguese Equities: PSI Falls 0.9% as the EDP Group Weighs on Lisbon

Lisbon spent Wednesday, 29 July, in the red, and once again the story sat inside a single corporate family. The PSI index (Portuguese Stock Index) closed down 0.93% at 9,049.41 points, shedding 85.17 points from Tuesday's 9,134.58 finish and slipping back below the 9,100 line it had reclaimed only a day earlier. The drag came overwhelmingly from the EDP complex: EDP Renováveis (EDP Renewables) and its parent EDP — Energias de Portugal (Energies of Portugal) both fell hard on the very morning the renewables arm published a first-half profit that had almost doubled. It was a near-carbon-copy of Monday's Galp episode — a heavyweight selling off into its own strong numbers — and, as then, the wider board was quieter than the index level suggested. Even after the pullback, the PSI remains about 18% higher than it stood a year ago.

Blue-Chip Movers

EDP Renováveis was the unambiguous loser, sliding roughly 2.4% to around €13.52 despite reporting a 96% jump in half-year profit (more on that below), and its parent EDP fell in sympathy, easing about 2% to the low €4.50s. Between them the two names carry enough weight to account for the bulk of the day's decline on their own. The counterweights were modest: Galp Energia, the country's flagship oil-and-gas group, firmed slightly as crude held its recent gains, and retailer Jerónimo Martins limited its losses to trade close to unchanged near €16.90 — but neither was strong enough to pull the index back into positive territory. Mota-Engil, the Porto-based construction group, held broadly steady around €4.62 as investors digested a Brazilian press report that it is in talks to buy into Odebrecht's engineering arm, while smaller names such as Teixeira Duarte sat among the day's handful of gainers. The session, in short, was less a broad sell-off than a concentrated one, written almost entirely by Lisbon's largest energy group.

Government Bonds and the Euro

The sovereign debt market drifted gently higher in yield, in step with the wider eurozone. The yield on Portugal's 10-year Obrigações do Tesouro (Treasury bonds) rose about 6 basis points to 3.53%, though because 10-year German Bunds — the market's benchmark — climbed a near-identical 5 basis points to 3.16%, the spread between them barely budged, holding around 37 basis points. That premium remains historically tight, a legacy of Portugal's run of budget surpluses and its steadily falling debt-to-GDP ratio. The move up in yields reflected renewed inflation worries as Middle East tensions kept crude prices firm, rather than anything specific to Lisbon. The euro, for its part, was becalmed: EUR/USD edged down 0.08% to $1.1381, holding within a narrow range after the previous session's gains and leaving the currency little changed on the week.

Business & Tech Focus: EDP Renewables Doubles Its Profit, and the Market Sells It Anyway

On paper, EDP Renováveis delivered a striking set of half-year numbers. Net profit climbed 96% year on year to €184 million, while EBITDA rose 11% to €1,057 million and recurring net profit — the figure that strips out one-offs — grew 33% to €183 million. Management pinned the improvement on solid operational performance and, tellingly, on higher gains from selling down assets, with the group's United States portfolio doing much of the heavy lifting. It was, by the headline measure, one of the stronger prints the PSI will see this reporting season.

And yet the shares fell almost 2.4%. Look past the profit line and the reasons come into focus: half-year revenue actually slipped 1% to €1,408 million as the average electricity selling price fell 6%, dragged down by lower power prices across the Iberian Peninsula and an unfavourable exchange-rate effect, and a chunk of the profit jump rested on asset-disposal gains rather than the day-to-day business of generating power. Investors, in other words, read a good headline built on soft underlying trading and a one-off boost, and chose to bank the recent share-price gains rather than pay up for it — the same "sell the news" reflex that greeted Galp's bumper report on Monday. For a market that has run hard all year, solid is no longer enough; only genuine surprises are being rewarded.

Deal Watch: Mota-Engil Circles a 40% Stake in Brazil's Odebrecht Engineering

Away from the earnings desk, the day's most intriguing corporate story came from Brazil. According to reports in the Brazilian financial press, Mota-Engil — Portugal's largest construction group and already a major player across Latin America and Africa — is in talks to acquire a 40% stake in Odebrecht Engenharia e Construção (Odebrecht Engineering and Construction, known as OEC), the engineering arm controlled by the holding company Novonor. OEC emerged from judicial reorganisation only in March 2026, and the reports stress that the discussions are preliminary: neither price nor structure has been settled, and any deal could take the form of a share purchase from existing owners, a capital injection into OEC, or some combination of the two, subject to due diligence and regulatory approval. The strategic logic is clear enough — pairing Mota-Engil's balance sheet and international footprint with OEC's engineering capacity would create a formidable bidder for the large infrastructure projects Brazil is lining up over the coming decade. Mota-Engil shares took the news calmly, holding near €4.62.

Earnings Watch: A Crowded Reporting Week

EDP Renováveis' report is one instalment in an unusually dense stretch of the PSI calendar. With the parent EDP group's full half-year figures, the banks, and Jerónimo Martins all still landing this week, the index's direction is being written company by company rather than set by any single macro theme. The early tone is unmistakable: Galp's beat on Monday met with a 5% sell-off, and now EDP Renováveis' near-doubling of profit has been greeted with another decline. Investors have plainly priced a good deal of optimism into Portuguese equities and are demanding real surprises — not merely healthy numbers — to push valuations higher from here.

The Day Ahead

Thursday's session in Lisbon should again hinge less on global headlines than on whichever cotada (listed company) opens its books next, with the parent EDP group and Jerónimo Martins the names to watch. A steadier oil price and a calmer bond market would give the wider board room to shake off the EDP complex's drag — but on this week's evidence, even good results are no guarantee of a good day.