Inflation Cooldown Knocks PSI Off Course as Sonae Stumbles

Lisbon stocks inch lower; Sonae leads the fallers ahead of results season

Portugal’s main share-index closed marginally in the red on Friday, surrendering a three-day winning streak as caution returned to European equities. The PSI finished the session at 8,426.96 points, down 0.23 %, mirroring the soft tone seen across most continental bourses.

What moved the market

• Domestic inflation surprise: October’s consumer-price report showed Portuguese headline inflation slowing to 2.3 % year-on-year and remaining flat on a monthly basis. While the data eased concerns over fresh interest-rate rises by the European Central Bank, it also stoked worries about faltering demand.

• Global backdrop: An unexpected acceleration in the contraction of Chinese factory activity and renewed uncertainty over U.S. trade policy gave investors another reason to trim risk. The euro’s weakness against the dollar, though supportive for exporters, failed to offset the cautious mood.

• Mixed earnings: Across Europe, corporate results offered no clear direction. In Lisbon, upbeat figures from CTT – Correios de Portugal lifted the postal operator, but not enough to pull the whole index into positive territory.

Sonae under pressure

Retail-to-telecoms conglomerate Sonae SGPS (ticker: SON) fell 1.94 % to €1.414, the steepest drop among PSI constituents. No company-specific news hit the tape; analysts attributed the slide to profit-taking after a strong October run-up and to nerves ahead of the group’s third-quarter numbers, due on 12 November.

Earlier in the year Sonae’s shares touched a seven-year high after first-quarter profits beat expectations. The consensus 12-month price target now sits at €1.43, implying limited upside from current levels.

Other notable movers

| Stock | Move | Comment ||-------|------|---------|| CTT | +2.8 % | Outperformance on the back of solid quarterly earnings. || EDP Renováveis | +1.1 % | Green-energy names found support from lower bond yields. || Jerónimo Martins | −0.4 % | Mild drift lower after a volatile week for European retail. || Mota-Engil | −0.1 % | Construction group paused after sharp mid-month swings. |

How the week stacked up

Despite Friday’s slip, the PSI eked out a 0.07 % gain over the week, extending its advance for October to roughly +2.8 %. In sector terms:

• Retail: Sonae gave back 2.0 % on the week, while Jerónimo Martins eased 0.36 %.• Construction/Real estate proxy: Mota-Engil edged 0.08 % lower.• Utilities: EDP group names were broadly unchanged, supported by falling yields.

Europe-wide, the STOXX Europe 600 dipped 0.5 % over the same period, and the STOXX Europe 600 Retail sub-index slid 1.3 %, underperforming its Portuguese peers.

Looking ahead

Investors will shift their focus to:

Corporate updates – Sonae’s quarterly report on 12 November and Galp Energia’s numbers on 5 November could set the tone for the index.

Economic data – Final Euro-area PMIs and the ECB’s autumn economic bulletin are due next week.

Geopolitics – Any fresh headlines on U.S.–China tariffs or Middle-East tensions remain potential volatility triggers.

With inflation retreating but external headwinds persisting, analysts expect the PSI to trade sideways in the near term, barring positive surprises from the upcoming earnings season.