The investor flight from the stock market appears to be slowing and confidence in equities is showing signs of return, research from Lloyds TSB shows.

The FTSE 100 endured its worst year in the index’s history in 2008 as investors fled equities amid the turmoil and moved their cash to safer investments such as cash or bonds.

The average investment in equities plunged in the first half of last year, from £52,000 in November 2007 to £22,500 in July 2008.

However, this exodus appears to have stalled, with the average investor now holding slightly more than six months ago – £23,500 in December 2008, compared to £22,500 in July.

Confidence in the market has also improved, with 63 per cent feeling apprehensive over the last six months compared to 58 per cent about the coming year.

Nathan Moss, managing director of Lloyds TSB wealth management, said: “Money is still moving to ‘safer’ investments, such as cash and bonds, as confidence in the future of the markets continues to be shaky.

“However, investors should keep an eye on their long term goals and seek professional advice before making any decisions.”

Rumour and speculation in the media clearly influenced investors’ decision in 2008, with 58 per cent of investors who made changes to their portfolio acting on what they had seen, heard or read in the media.

Less than a third (27 per cent) took action based on professional guidance from their financial adviser or bank, Lloyds TSB said.

Mr Moss added: “This data could indicate a turning point for the markets. We are seeing investors pausing before moving more cash out of the FTSE and government and global intervention is potentially beginning to restore investor faith.

“Whatever their next move, investors should seek expert financial advice and be aware of the consequences of their actions before making a rash decision that they might come to regret.”