(Yicai) Nov. 24 -- China's bull market is expected to remain unchanged, brokerage firms predicted, despite the three main stock indexes experiencing a significant retreat last week, as part of mid-term adjustments.

The Shanghai Composite Index fell 3.9 percent to 3,834.89 in the five-day trading week ended Nov. 21. The Shenzhen Component Index and ChiNext Index plunged 5.1 percent to 12,538.07 and 6.1 percent to 2,920.08, respectively.

The technical mid-term adjustments in the Chinese stock market have already begun, said Zhang Dongdong, analyst at Pacific Securities. There may be further declines in US and European stocks, which could negatively impact the Chinese market, he noted, adding that the mid-term adjustments are still in their early stages of decline.

The three stock indexes continued to decline today, with the Shanghai Composite Index down 0.3 percent, the Shenzhen Component Index down 0.6 percent, and the ChiNext Index down 0.8 percent as of lunch break.

Even if the stock market undergoes mid-term adjustments, the long-term upward momentum is expected to remain unchanged, Zhang predicted. He advised investors to remain patient and keep some positions available to seize future opportunities.

Last week, the global stock markets experienced a big decline because of weakening expectations for interest rate cuts by the US Federal Reserve by the end of the year, said Liao Jingchi, analyst at Zheshang Securities. There is still a need for short-term inertia adjustments, he noted, adding that from a longer-term perspective, the systematic slow bull market continues.

The major trend in the artificial intelligence industry has not ended, according to a research report by Shenwan Hongyuan Securities. However, there are fluctuations in the shorter term, which are in line with historical patterns.

The "double-phased bull market" is a typical feature of the Chinese stock market's bull market cycle, the Shenwan Hongyuan Securities noted. After the adjustments, investors should patiently await the cyclical improvement in fundamentals, which will signal the beginning of the second bull market phase.

This bull market round is still promising, both in terms of duration and potential, said Zhang Yusheng, analyst at Everbright Securities. Sustaining a bull market requires not only an improvement in liquidity, but also, the longer the time cycle, the higher the correlation between the market and fundamentals, he added.

Therefore, when anticipating the possibility of a long-term bull market, it is essential to focus more on the realization of fundamental expectations, Zhang Yusheng pointed out.

The ChiNext Index, which comprises the 100 largest and most liquid stocks on the Shenzhen Stock Exchange’s ChiNext technology board, is the core engine of this bull market cycle. The index's recent decline is just a normal pullback within the bull market, Xue Hongyan, special researcher at Jiangsu Su Merchants Bank, told Yicai.

"In the past year, the ChiNext Index has shown the characteristics of a bull market," Xue noted. "Although there has been a retreat since the peak in October, its extent has not reached the typical 20 percent threshold seen in past bull markets, and it is far below the maximum drawdown in the past five years, indicating that the current adjustments are within a manageable range."

These adjustments are primarily a result of profit-taking and emotional responses during the upward trend, Xue pointed out, noting that investors should avoid chasing high prices and panic selling, but instead focus on high-quality growth stocks that have proven performance.

Editor: Futura Costaglione