Lisbon’s PSI20 Hits 14-Year High as Mota-Engil Leads Rally

Portugal’s benchmark index touched levels unseen since 2010 in Thursday’s shortened trading week, and the mood on the Bolsa de Lisboa suddenly feels lighter. Shares of Mota-Engil did most of the heavy lifting, but several household names helped nudge the market higher and leave investors wondering whether 2026 could finally be the year the domestic exchange regains its pre-pandemic swagger.

Quick takeaways before the closing bell

• PSI20 ended at 8 514.37 points, a rise of 0.53%.

• Mota-Engil jumped nearly 3 % on fresh guidance upgrades.

• Jerónimo Martins and Galp Energia also posted gains above 2 %.

• EDP Renováveis and Altri lagged, trimming the day’s advance.

Why today’s rally matters

Beneath the headline number lies a more encouraging trend: the PSI20 has climbed for four consecutive sessions, powered by energy, construction, and consumer-staples heavyweights. With the European Central Bank expected to keep rates steady for longer, cheaper borrowing costs are giving cyclical shares room to breathe. Local traders say the index’s ability to hold above 8 500 points could trigger fresh inflows from foreign funds still under-weight Portugal.

Spotlight on Mota-Engil’s surge

A flurry of strategic newsflow fuelled the construction conglomerate’s outperformance. Management on Tuesday quietly lifted 2026 revenue ambitions above €6 B, citing stronger-than-anticipated order books in Latin America and Africa. Investors were also reminded of the group’s role in the internationally backed Lobito rail corridor, a project seen as transformative for regional trade. Those headlines, coupled with a consensus “Strong Buy” rating among the three brokerages covering the stock, sent Mota-Engil to €5.12 at the close. Analysts’ average 12-month target sits near €6, implying further upside if execution risk is kept in check.

Other movers and shakers

The good mood spread to Jerónimo Martins, owner of the Pingo Doce supermarket chain, which rose 2.7% on expectations of resilient food inflation. Galp Energia added 2.6% as Brent crude flirted with $80. Telecom operator NOS and engineering firm Teixeira Duarte booked smaller yet still healthy gains. On the downside, renewable-energy darling EDP Renováveis slipped 1.7% amid profit-taking, while pulp producer Altri sagged after a broker downgrade.

What analysts are watching

Market-watchers point to three near-term catalysts:

ECB guidance on rate cuts that could revive high-dividend utility names.

Progress in Lisbon’s flagship privatisation of TAP Air Portugal, which could unlock fresh liquidity and set valuation benchmarks for transport infrastructure plays.

The government’s promised roll-out of new tax incentives for corporate investment, due in the first quarter, seen as critical for smaller-cap industrial names starved of capital.

The broader 2026 backdrop

Economists still preach “cautious optimism.” The Bank of Portugal is pencilling in 2.1% GDP growth, powered by EU recovery funds and a rebound in tourism. Yet structural worries linger: modest productivity, public-debt overhang, and dependence on tourism. BlackRock’s Iberian desk told clients this week that Lisbon’s political stability remains its “secret weapon,” but warned that a slowdown in Germany or higher-for-longer inflation could quickly sap risk appetite.

What to watch next

Portfolio managers are already eyeing the next batch of corporate earnings for clues on margin resilience. For retail investors who rode the recent dip, today’s close above 8 500 acts as a psychological marker: hold it, and the chart technicians talk about 8 800 as the next target. Lose it, and attention pivots back to long-standing worries about capitalisation gaps and innovation deficiencies in Portuguese corporates.

Either way, Friday’s green finish provides a rare dose of January cheer – and, for now, the bulls are finally the ones setting the tone on the Lisbon trading floor.