"It was a very difficult match for me," said the 23-year-old, who made it to the Estoril final in 1995 but lost to Austria's Thomas Muster.
Martin, second-seeded in Portugal and ranked No 8 in the world, fresh from helping the United States beat Britain in the Davis Cup, missed an opportunity to take his second title this year, after a victory at the Sydney International event in January.
In the women's final in Oieras, Slovenia's Katarina Srebotnik beat Hungary's Rita Kuti Kis in just over an hour, 6-3, 6-1.
In Madras yesterday, Byron Black of Zimbabwe won the Gold Flake Open, beating the German Rainer Schuttler, 6-4, 1-6, 6-3.
Andre Agassi put his personal problems behind him and stayed on course for his first ATP title this year with a 6-3, 6-0 win over Germany's Hendrik Dreekmann in the semi-finals of the Salem Open in Hong Kong on Saturday. Yesterday's final against Boris Becker, though, was twice washed out and will be played today.
After his win over Dreekmann, Agassi confirmed that he and Brooke Shields have filed for divorce.
The third-seeded Agassi, who entered as a wild card, denied going to Asia to get away from the pressures of a high-profile divorce. The American, who is ranked No 12 in the world, said he simply needed to play more tennis.
Agassi was 6-7, 6-4, 2-0 ahead in yesterday's final. Becker recovered from 5-3 down to win the first set 7-4 on a tie-break after Agassi's game had suddenly deserted him. But the American bounced back in the second set, breaking a determined Becker in the fifth game before levelling the match.
The German, heading for retirement later this year, dropped his serve in the first game of the deciding set.
Anna Kournikova was yet again defeated going for her first singles title, the Russian teenager falling to the unseeded Romanian, Ruxandra Dragomir, in the semi-finals of the Bausch & Lomb Championships in Florida on Saturday.
Dragomir halted the ninth-seeded Kournikova's impressive run on the Amelia Island clay, registering a 6-3, 7-5 victory, and was due to play Monica Seles in the final last night.
Kournikova, the tour's highest profile player without a title to her name, looked on her way to ridding herself of that distinction. After reaching the Hilton Head final last week - where she lost to Martina Hingis - Kournikova continued playing some of the best tennis of her career in Florida, scoring decisive upsets over the top seed Lindsay Davenport and Patty Schnyder. But on Saturday, Dragomir rallied from down a break in each set.
Dragomir, 26, made 14 unforced errors compared with 35 for Kournikova. She recovered from 3-1 down in the second set, which featured five consecutive service breaks before the Romanian closed out the match by holding serve to love.
"I probably tried to finish points too quick because I didn't want to do a lot of running," said Kournikova, who pulled out of the doubles with a minor hip injury. "I don't want to use that as an excuse because she played well."
While Kournikova was enjoying the spotlight last week, Seles was quietly making her way to the final, dropping only nine games in her four wins. Her semi-final victory over Conchita Martinez took 44 minutes and equalled the worst defeat of the Spaniard's career, to Seles at the 1989 Virginia Slims Championships.