Loeb trails Gronholm by four points in the overall standings

Championship pacesetter Gronholm led after the super special stage but was hindered on the morning stages by a damaged shock absorber on his Ford.

Finn Gronholm won stage five but French rival Loeb took the final two runs in his Citroen to lead by three seconds.

Gronholm's team-mate Mikko Hirvonen is third with Petter Solberg fourth.

Both Hirvonen and 2003 world champion Solberg struggled with excessive tyre wear with Solberg suffering a brief spin on stage six.

Britain's Matthew Wilson finished the day in 14th place.

"We have the lead now but the fight is really very close with Marcus," said Loeb, who won the previous rally in Mexico earlier this month.

"We'll have to continue to fight like this on Saturday and probably on Sunday."

Rally of Portugal standings after day one

1. Sebastien Loeb (France) Citroen 1:25:39.00
2. Marcus Gronholm (Finland) Ford +3.10secs
3. Mikko Hirvonen (Finland) Ford +25.30
4. Petter Solberg (Norway) Subaru +32.80
5. Daniel Sordo (Spain) Citroen +1:10.90
6. Jari-Matti Latvala (Finland) Ford +1:42.20
7. Manfred Stohl (Austria) Citroen +2:01.00
8. Chris Atkinson (Australia) Subaru +2:12.20
9. Daniel Carlsson (Sweden) Citroen +2:19.40
10. Toni Gardemeister (Finland) Mitsubishi +2:28.80