Lisbon Stocks Break 14-Year High as Teixeira Duarte Soars

The Lisbon trading floor has enjoyed an unusually bright October: share prices keep inching higher, and the benchmark PSI—Lisbon’s main stock index, formerly the PSI-20—is hovering around records not revisited since the aftermath of the global financial crisis. One construction company—Teixeira Duarte—has vaulted to the front of every trader’s screen. Behind the headlines lie stronger-than-expected macro indicators, a benign interest-rate backdrop and a dash of investor FOMO that together have pushed Portuguese equities into territory few predicted even six months ago.

A rally long in the making

A quick glance at the tape tells a straightforward story: on 13 October the PSI closed at 8 226.37 points, eclipsing levels last seen in April 2010, after having flirted with the same landmark on 3 October. The outperformance is anything but a one-day miracle. In the 30 days to 17 October the index gained almost 7 %, capping a 23.9 % advance compared with the same period last year. The comeback is striking when one remembers that the benchmark was still below the 6 000-point threshold as recently as summer 2024.

Why the PSI keeps defying gravity

Several currents converge. First, forecasters expect the Portuguese economy to expand 1.9 % in 2025—comfortably ahead of the euro-area average—thanks to solid EU transfer flows and a labour market where unemployment is holding near 6 %. Second, eight successive rate cuts from the European Central Bank since late 2024 have flooded the system with liquidity, a godsend for risk assets. Finally, inflation is sliding back toward 2 %, allowing real household incomes to recover and bolstering corporate earnings expectations. Energy majors, utilities and telecoms have set the pace in recent weeks, but momentum has also spread to smaller caps that had long remained out of the spotlight.

Teixeira Duarte steals the spotlight

None has shone brighter than Teixeira Duarte S.A.. The builder’s shares leapt 8.4 % in the 13 October session, taking their total year-to-date rise above 470 % and paving the way for the stock’s return to the PSI in September. The surge is underpinned by hard numbers: first-half net profit hit €43 M, quadruple the previous year, largely because a March debt-refinancing deal shaved financing costs. A €1 630 M construction backlog and a role in the initial stretch of the Porto–Lisboa high-speed rail line, worth roughly €440 M to the company, add tangible growth prospects. Even so, its free-float-adjusted weight in the PSI remains modest, keeping its overall index contribution in check despite the spectacular price action.

European winds and global tremors

The Portuguese rally has unfolded in step with a broader European upswing: Frankfurt’s DAX, Madrid’s IBEX-35 and Paris’s CAC-40 all posted gains on 13 October. Yet jitters are never far away. When trade tensions between the US and China resurfaced on 17 October, the PSI opened down 1.1 % and most regional bourses followed suit. Safe-haven assets responded in textbook fashion, sending gold to a new record near $2 350/oz and pushing the euro higher against both the dollar and the pound.

Can the party last?

Brokerage desks remain largely upbeat. Bankinter argues the PSI could tack on another 15 % by 2026, citing healthy corporate margins and Portugal’s improving fiscal metrics—reflected in tighter spreads on 10-year sovereign bonds. Still, strategists caution that valuations are no longer cheap, leaving the market vulnerable to an external shock or a sudden rethink of the path for US monetary policy.

What it means for Portuguese households

For savers battered by years of near-zero returns on deposits, the stock-market renaissance offers an alternative avenue for building wealth. Pension funds and insurance companies, historically underweight domestic equities, have begun to rebalance. Retail investors also appear more engaged: trading volumes on Euronext Lisboa are up double-digits from a year ago, according to exchange data, helped by mobile-app brokers that lower the entry barrier.

The next signals to watch

Market attention now shifts to three dates. On 29 October, the US Federal Reserve meets amid speculation of a first rate cut; early November brings third-quarter earnings from Lisbon’s heavyweight energy duo, EDP and Galp, crucial for the index’s direction; and by mid-December Portugal’s parliament is expected to finalise new crypto-asset supervisory rules, a decision that could affect financial-sector sentiment. Whether these catalysts extend the bull run or trigger the long-awaited pause, one thing is clear: Portuguese equities have reclaimed relevance, and investors at home and abroad are finally taking note.