Confidence in the UK stock market among private investors has reached the highest point in eight months, according to Lloyds Bank Private Banking’s latest monthly investor sentiment index.

The research revealed that sentiment towards UK shares has rebounded after having fallen in September, making it the second most popular investment class after UK property. The sentiment towards UK shares rose to +29 (40 per cent held a positive view and 11 per cent held a negative view), an improvement on the previous high of +27 in August and a substantial increase from the first survey result of +16 in March.

This follows numerous positive economic indicators for the UK in recent months, coupled with stronger performance among a number of the country’s trading partners, particularly in the eurozone, said Ashish Misra, head of investment policy at Lloyds Bank Private Banking.

“The positive news flow about the UK economy appears to be having an impact on the UK stock market, added to which we have seen some economic improvement among the UK’s trading partners, particularly in the eurozone. Many UK companies have exposure to international markets, particularly in the FTSE 100, where two-thirds of profits are derived from overseas, so positive shifts in other markets have a major impact on the UK stock market,” explained Misra.

In comparison, investors have cooled off on the US stock market after the government shutdown led to market uncertainty and resulted in US shares being the only investment class not to rise, remaining at +9 for October.

The survey also noted that confidence in UK property reached its highest point since the survey’s inception, registering an impressive rise in sentiment to +49, in comparison to just +9 in March. Sentiment towards property has grown month-on-month following the announcement of the government’s Help-to-Buy scheme in March, and it has been the most popular asset class since June.

The online survey was conducted by research firm YouGov between 27 - 30 September and polled 1,188 adults from the industry.