A measure of monthly investor sentiment painted a bright picture for October, with particular optimism in sterling-denominated asset classes.

Investor confidence rebounded in October after being knocked back by China's slowing economy last month, according to a survey of 4,356 UK adults by Lloyds Private Banking.

In welcome contrast to September, when China woes brought down investor sentiment towards eight out of ten asset classes, October saw sentiment towards eight out of ten asset classes improve.

However, while net investor sentiment picked up by 4 percentage points from last month to 7 per cent, this was still 8 percentage points down from a year ago, suggesting cautious attitudes remain.

Japanese equities and emerging market equities enjoyed the largest rise in sentiment, of 7 percentage points each, following their drastic drops of 14 and 20 points respectively in September.

The outlook for eurozone equities remained bright, with the asset class logging an increase of 6 percentage points, making October its third month in a row of improvement.

Meanwhile, the “safe havens” of gold (down 2 percentage points) and UK government bonds (down 1 percentage point) lost appeal as investors seemed to go for asset classes with greater risk-reward potential. UK property was the winner by far in terms of investor sentiment, climbing 6 percentage points to 53 per cent, comfortably ahead of the next favourite, UK equities, at 24 per cent.

“With the US Federal Reserve not raising interest rates in September, and ongoing concerns over China, there is still much uncertainty in the global economy. It is encouraging to see investor sentiment increase however, and the strength of the sterling denominated asset classes which continue to keep levels of sentiment in positive territory,” said Ashish Misra, head of portfolio specialists at Lloyds Private Banking.