Europe's markets have remained resilient in 2026, but regulators warn that elevated valuations and geopolitical risks could leave investors exposed to sudden corrections.
The European Securities and Markets Authority (ESMA) has warned that strong investor optimism is masking a number of vulnerabilities across European Union (EU) financial markets, including stretched technology valuations, geopolitical tensions and weaker economic growth. Esma said valuation risk continues to be a concern across most fund categories In its latest risk monitoring report, the regulator said financial markets have remained resilient despite heightened volatility and uncertainty.