Europe’s main financial watchdog warned that strong gains posted by stock markets across the region could be unsustainable, with investors urged to brace themselves for further turmoil as a result of the Covid-19 pandemic.

In an unusual missive, the European Securities and Markets Authority in a 2 September report warned of a “prolonged period of risk” to both institutional and retail investors, including “possibly significant” market corrections in the months to come as the pandemic continues to wreak havoc on the global economy.