Malaysian stocks stayed volatile in a thinly traded market for a second day on Thursday as an election watch pushed many investors to the sidelines.

Benchmark FBM KLCI shot up 15 points to 1,700 levels in early morning trade before losing steam and eased back to 1,689 levels by mid morning.

Traders said that weaker US economic data outlook and regional markets may put a drag on any attempt to rally the Malaysian stocks market.

"In normal conditions the volatility would attract more trading interest, yes, but because of election uncertainty, most traders are sidelined," one head of research at a local bank said.

"I suspect the same few people may be buying and selling."

Despite the volatility, only about 200 million shares were exchanged. Similar to Tuesday’s trend, the KLCI index tested a new 11 week high but did not see sustained buying.

The market which reached 1,692 levels on Tuesday, hit a day’s peak of 1,700 levels.

Over the last two trading days, since Prime Minister Najib Abdul Razak dissolved parliament for the 13th general election, the market has traded in a wide 65 point range, which was unusual, analysts said.

Go to KiniBiz for more.