“Some stocks which were overvalued are down, also some government-linked stocks,” he added.

Intense speculation about the election date and the slight possibility that the long-ruling Barisan Nasional government may be unseated is leading some investors to take profits on recent gains, analysts said.

“It's just the rumours. People are worried about the elections. That's the trigger,” said an analyst at a local investment bank who declined to be identified.

Among the biggest losers were mobile phone operator Axiata Group Bhd, which fell 6.5 per cent to RM6.21 and bank CIMB Group Bhd, which dived 5.0 per cent to RM7.20. UEM Land Holdings Berhad was 4.8 per cent lower at RM2.18.

So far this year, the Kuala Lumpur index has fallen around 3 per cent, underperforming its Southeast Asian peers. Its 14-day relative strength index is at 33.198, among the lowest in the region. A level of 30 or lower indicates a market is oversold.

One Kuala Lumpur-based equities trader said that foreigners were trimming positions ahead of the polls, adding that the election was likely to overshadow the market for the first half of this year.

“Telecoms were among best performers last year, so they are selling targets,” she added.

Malaysia's ruling coalition suffered its worst ever election result in 2008, losing its two-thirds majority in Parliament for the first time. The upcoming elections are predicted to be even closer, although the ruling coalition is still widely expected to win.

Eoin Treacy's view Malaysia's stock market has been ranging with an upward bias for much of the last six months and recently encountered resistance in the region of 1700. Today's pullback see's the Index testing its 200-day MA and it will need to hold above 1600 if the benefit of the doubt is to be given to potential for continued higher to lateral ranging.