Investing.com-- Investor sentiment toward Asia’s economic outlook has improved from record lows, with growing optimism on China, according to Bank of America’s (BofA) latest Asia Fund Manager Survey.

A net 59% of respondents expect weaker global growth, a notable improvement from April’s 82%, while pessimism on Asia’s economy eased to 77% from 89%, the BofA survey showed.

The shift follows signs of healing in trade tensions and expectations of tariff reductions after recent U.S.-China talks, BofA analysts noted. BofA highlighted that the survey was completed on May 8, prior to the US-China meeting in Geneva, which was followed by a swift announcement regarding the reduction of tariffs.

China saw the most marked sentiment change, with only 16% of investors seeking opportunities elsewhere, down from 26% in April.

A record 10% reported being fully invested in China. "Structural bearish views (are) moderating," said BofA strategists, though they noted a net 48% still anticipate a weaker Chinese economy.

India displaced Japan as the most favored market, benefiting from supply chain shifts, while China rose to third place from the bottom in April, according to BofA.

Sector preferences in Asia ex-Japan favored telecom and software, while energy and materials remained out of favor, analysts said.

In Japan, banks topped sector picks amid higher rates, while semiconductor outlooks improved, with 42% expecting a softer cycle versus 59% last month, they added.

The survey, conducted May 2-8, included 208 panelists managing $522 billion in assets.