Markets, Business & Tech Briefing: PSI Holds Flat, Novobanco Profit Slips 16%, Euro Tops $1.15

Market Wrap: Lisbon Ends Almost Exactly Where It Started

After Monday's confident bounce, Tuesday was a study in stillness. The PSI index (Portuguese Stock Index) closed the session down just 0.03% at 9,169.02 points, shedding a token 2.68 points and leaving the benchmark within a rounding error of where it began the day. It was one of those quiet summer sessions where the headline number hides a good deal of movement underneath: some of the blue chips that dragged on the market on Monday were among Tuesday's best performers, and the day's clear leader from the previous session went into reverse. European bourses were mixed and directionless, with light August volumes and a data-heavy week ahead giving investors little reason to commit either way. For Lisbon, holding onto Monday's gains rather than handing them back counts as a respectable result.

Movers: Yesterday's Laggards Lead as Jerónimo Martins Slips

The standout feature of the day was a neat rotation. Semapa, the paper-and-cement holding that was Monday's weakest blue chip, flipped to become Tuesday's strongest, adding about 1.56%. Right behind it, the postal and logistics operator CTT — Correios de Portugal (Portugal Post) — rose roughly 1.31%, recovering the ground it lost at the start of the week. Millennium BCP — Banco Comercial Português (Portuguese Commercial Bank) — extended its strong run with a gain of around 0.74%, and the paper-and-pulp maker The Navigator Company advanced about 0.55%, with Galp Energia and Sonae also edging into positive territory.

The mirror image played out at the top of Monday's leaderboard. Jerónimo Martins, the food-retail group that had led the index a day earlier, was Tuesday's weakest name, giving back roughly 1.02% as some of that buying enthusiasm faded. The construction and engineering group Mota-Engil eased about 0.90%, the telecoms operator NOS slipped around 0.66%, and the grid operator REN — Redes Energéticas Nacionais (National Energy Networks) — fell close to 0.58%. EDP — Energias de Portugal (Portugal Energy) — drifted down about 0.34%. With gains and losses this evenly matched, it is little wonder the index finished the day essentially unchanged.

Business & Tech Focus: Novobanco Profit Falls, Farm Aid Brought Forward

The day's headline corporate result came from Novobanco. The bank — now under the control of France's BPCE group following last year's landmark sale — reported first-half net profit of €367.2 million, down 15.6% on the same period of 2025. The dip was not a story of a weaker underlying business so much as of one-off drags: the tax bill jumped 38%, from €62 million to €85 million, and operating costs rose 11.8%, swollen by non-recurring expenses tied to the change of ownership. Other operating income also fell sharply, from €57.5 million a year earlier to €14.6 million. Strip out those effects and the picture is steadier — customer loans have grown roughly 6% since the start of the year — but the reported number is a reminder that even a healthy bank pays a price, literally, for a transaction as large as its own sale.

On the policy front, the government confirmed it will bring forward the payment of European farm-support subsidies, moving the disbursement up from October to September. The measure is designed to ease the cash-flow squeeze on Portuguese farmers, many of whom are still absorbing the costs of a difficult year, and it channels the annual Common Agricultural Policy transfers into producers' accounts a month earlier than usual — a small piece of timing that can matter a great deal to a sector that lives season to season. Alongside it, banks warned they expect the production of new credit to slow now that the Banco de Portugal (Bank of Portugal) has tightened its lending recommendation, a signal worth watching for the retail-banking names that make up so much of the PSI.

Bonds, the Euro and Euribor at Fresh Highs

In the fixed-income market, Portuguese debt firmed. The 10-year Obrigações do Tesouro (Treasury bonds) yield eased to about 3.44%, down around five basis points on the session, keeping the country's borrowing costs comfortably contained and its spread over benchmark German Bunds close to the historically tight levels that have defined the summer. Short-term money, however, is moving the other way: the three- and six-month Euribor rates both climbed to fresh highs, with the more widely watched 12-month benchmark hovering near 2.93%, its firmest reading in almost two years. The divergence captures the moment neatly — investors are relaxed about Portugal's long-run solvency but increasingly convinced the European Central Bank's next move on rates could be up rather than down.

That same conviction is showing up in the currency market. The euro traded above $1.15 against the dollar, at roughly 1.1510, hovering near its strongest level since the middle of June. The move owes something to easing geopolitical tension after Washington stepped back from planned strikes on Iran, but also to a run of firmer-than-expected euro-zone economic data that has reinforced bets on a more hawkish ECB. For Portugal's exporters a stronger euro is a mild headwind; for its many mortgage-holders, the accompanying rise in Euribor is the number that will land on the doormat.

The Day Ahead

Wednesday brings more of the macro that has been driving sentiment all week, with fresh euro-zone activity readings due and the interest-rate debate firmly back at the centre of the picture. Domestically the earnings calendar is thinning out, though a few second-tier names have yet to report. With the index perfectly balanced, a firmer euro capping the exporters and rate-sensitive banks pulling in different directions, Lisbon looks set for another session that turns on the macro data rather than any single Portuguese story — direction, for now, is the market's to earn.