What drives the Stock Market up GROWTH or INFLATION?

Most of the Fundamental Analysts say that growth drives the prices of the Stocks up, is it right? Most of those Analysts said that a drop in the prices of Crude would help the market rally but when Crude prices were tanking most of the World Markets too were tanking, when the Crude fell to 33$ the Dow Jones Industrial Average was not at its life time high, neither the Asian Market Indices like Sensex (India), HangSeng, Shanghai Composite (China) were trading close to lifetime highs but were languishing close to more than 50% down from there lifetime highs and now that the prices of World Markets have improved, the Crude too has more than doubled in price.

A small query for all my readers, do you know the Stock Markets in the World that gave most returns?

Was it Bovespa which traded at 19K in 2000, 8K in 2003 and traded at 74K in 2008 a whopping return of 900% over 5 years, or was it the Sensex which traded at 6K in 2000, 2.3K in 2003 and went on to trade at 21K in 2008 again a handsome return of 800% in 5 years, And I have not forgot the Shanghai composite which was trading at 1.2K in 2006 and went on to trade above 6K in 2008 a return of 500% in just 2 years. But dear readers it seems you have forgot Zimbabwe where the unemployment rate is close to 80%, yes dear readers you have forgot Zimbabwe

According to

http://www.zimbabwemetro.com/finance/stock-exchange/zimbabwe-stock-exchange-market-capitalisation-reaches-us203-billion/

Zimbabwean Stock Market gained 300000%,

http://www.thezimbabwetimes.com/?p=12045

Says that Most shares gained 50,000% in one day

http://www.dailyreckoning.com.au/zimbabwe-stock-market-booms/2007/06/04/

Attributes a smaller return of 12,000% over a year to the Zimbabwean Stock Markets

So friends how come a Country whose employment rate is just 20% gives such handsome returns on investments in Stock Markets, It just due to the fact that the inflation there is running hot as you all know and that the biggest note there is 1 Billion (approx) and it can purchase a loaf of bread for you.

In my next post I will elaborate how Zimbabwe is not an exception but an example of the Contrarian Theory that the Inflation drives the Stock Markets and in a post after that why the US $ would not be sinking but gaining, Till then Take Care and try to beat the INFLATION.