Interest rates and oil prices hit investor confidence

Investors' confidence in the stock market has been knocked by rising interest rates and oil prices, research showed today.

Just 28% of regular investors expect the FTSE 100 index to increase between now and the end of the year.

At the same time 24% of people think the market will fall over the next six months, while 48% think it will remain around its current level, according to JPMorgan Fleming.

The group said its investor confidence index had been falling steadily since the beginning of the year, when it stood at 92 points, to just 60 points in July.

It said rising interest rates, combined with increases in the price of oil were likely to continue to weigh on investors' confidence in the short-term, suggesting the FTSE would continue to trade in the 4,300 to 4,500 range for some months to come.

Mark Campbell, head of UK business at JPMorgan Fleming, said: "Investors' opinions are to a large extent echoing recent stock market performance.

"Prior to the latest survey, the FTSE 100 Index of leading shares had ended lower for four weeks in a row and was back down at levels last seen at the beginning of the year.

"This has knocked confidence and made people less sure that things will improve by the end of the year," he said.