Do mutual fund flows drive equity markets?

Global equity markets have rallied in recent months, partly due to a normalization of operations following the gulf war, and also due to increased liquidity flowing into mutual funds. Though not a direct causal relationship, there is a correlation between stock market performance and equity mutual fund flows. One possibility is that stability and growth amongst equity mutual fund markets often helps to stabilize stock markets as well. However, the relationship between stock and global equity markets could be coincidental and thereby not offer any means of predicting future market activity.