Short-term adjustments are beneficial for the release of market risks and the long-term upward trend of A-shares continues.

Last week, the A-share market experienced wide fluctuations at high levels. On September 4th, the previously strong performing computing power sector adjusted, dragging the index down and causing a general decline in primary industry indexes, with only the banking index rising. However, after a brief adjustment, on September 5th, the A-share market saw a timely recovery, with the Shanghai Composite Index returning to 3800 points. In response to this, analysis from Huaxi Securities believes that based on historical experience, during past A-share market rallies exceeding 30%, there tends to be a 6% to 10% retracement. Since the beginning of April, the A-share market has been on an upward trend for 5 months, so there is a demand for profit-taking among some investors with profits. "Moreover, since August, the market has accelerated its rise, intensifying the phenomenon of fund clustering. The crowding in the market growth makes it inevitable for the volatility to increase," Huaxi Securities stated. They also emphasized that the short-term adjustment in the A-share market is a periodic retracement driven by emotional fluctuations and concentrated trading. Additionally, this short-term retracement is also a process of releasing risks, which is beneficial for the market to move in a more stable and sustainable manner.