Investor sentiment in Asia rose significantly in the third quarter, hitting its highest level since 2007, according to a quarterly survey released Thursday by ING Groep NV.

ING's pan-Asia index jumped 8% to 143 in the third quarter from the previous quarter, its highest score since the survey's launch in the third quarter of 2007.

Investors in most Asian markets became more optimistic on the back of the strong performance of regional stock markets, ING said.

Sentiment in export-oriented markets such as Hong Kong, Singapore, South Korea, and Taiwan had the biggest improvement, reflecting investors' high expectations of a global economic recovery.

A majority of the survey's participants - 61% - said they are optimistic U.S. economy will pull out of a recession next year.

The score for the third quarter marks the third consecutive quarter in which investor sentiment has improved, said Nicholas Toovey, regional head of equity at ING Investment Management Asia.

The low point came the fourth quarter of 2008 when ING's index hit 73. The score has risen 95% since then as "the economic outlook in every country has improved and risk appetite has clearly improved," Toovey said.

"It has also helped that stock markets have performed very well."

Hong Kong's benchmark Hang Seng Index is up 54% so far this year; the Korea Composite Stock Price Index, or Kospi, is up 47.2%; and China's benchmark Shanghai Composite Index, which covers both A and B shares listed on the Shanghai Stock Exchange, is up 64%.

Investors in China and India continued to be the most optimistic in the region, while Japanese investors continued to be the most pessimistic, according to the survey.

Most of the investors surveyed - 71% - said their biggest concern was emerging inflation.

Despite the improvement in sentiment, the most popular investment for Asian investors was cash, with 82% of the survey's respondents saying they had cash holdings. Local shares, particularly those of financial services companies, ranked as the second most popular investment.

ING conducted the survey in September, polling 1,342 individuals across 13 markets in the Asia Pacific region with a minimum of US$100,000 in assets. The requirements were slightly lower for those polled in Indonesia and Philippines.

-By Ellen Sheng, Dow Jones Newswires; 852-2832-2336; ellen.sheng@dowjones.com