Core Viewpoint - The recent performance of A-shares is under scrutiny as the market faces both internal and external challenges, raising concerns about whether the Shanghai Composite Index will hold above the 4000-point mark [2][12]. Group 1: A-share Market Performance - The current bull market in A-shares, which began in September 2024, is experiencing difficulties, with significant net redemptions in equity ETFs, particularly those held by institutions [2][8]. - The total share of equity ETFs in China has been declining since reaching a peak of 22,236.69 billion shares at the end of 2025, dropping to 20,977.90 billion shares by the end of February 2026 [2][9]. - The Shanghai Composite Index has struggled to maintain its position above 4000 points, recently closing at 4049.91 points after a 0.85% drop, indicating a potential test of the critical 4000-point level [2][12]. Group 2: Global Market Context - Global stock indices have faced a downturn, with significant declines observed in major markets such as South Korea (down 11.12%), Japan (down 8.67%), and France (down 7.51%) since the onset of geopolitical tensions in the Middle East [5][6]. - Despite the global downturn, the Shanghai Composite Index's decline of only 2.71% during the same period suggests a degree of independence in its performance, attributed to its relatively lower valuation compared to other global markets [5][6]. Group 3: Institutional Behavior - Recent reports indicate that institutional investors have begun to exit the market, with net redemptions in equity ETFs amounting to 10.62 billion yuan, reflecting a trend of profit-taking after substantial gains during the bull market [8][10]. - Regulatory changes, including increased margin requirements, have contributed to a more cautious approach among investors, leading to a reduction in leverage and a focus on stabilizing market conditions [10][11]. - The decline in equity ETF shares is seen as a strategic move by institutions to realize profits while adhering to regulatory guidance, rather than a sign of pessimism regarding the long-term outlook for A-shares [10][14]. Group 4: Future Outlook - Historical analysis shows that the Shanghai Composite Index has only successfully maintained a position above 4000 points on two occasions, both of which were followed by prolonged bear markets [12][13]. - However, experts believe that the current market conditions are more favorable for sustaining the index above 4000 points, citing the increasing importance of the capital market and the attractiveness of Chinese valuations amid global uncertainties [12][13]. - The recent profit-taking by institutions is viewed as a normal operational strategy rather than a negative sentiment towards the market's future, with many institutions remaining optimistic about A-shares [12][14].