Kuala Lumpur - Malaysian shares dropped 2.5 per cent at midday Friday due to investor fears of increasing political instability, said analysts. 

The Kuala Lumpur Composite Index had opened at 1153.7 points, and dipped to 1124.53 points, with major losses in all sectors. 

On Thursday, the entire exchange was suspended due to a technical glitch. 

Analysts attributed the drop to investor uncertainty following a week of shocking revelations relating to top opposition and government leaders. 

On Saturday, former deputy premier-turned-opposition leader Anwar Ibrahim faced fresh sodomy allegations by a former male aide. 

Anwar, 60, denied the allegations and on Thursday revealed alleged links between Deputy Prime Minister Najib Razak and a Mongolian woman who was murdered two years ago. 

"Investors are cautious over the political uncertainty and are taking a wait-and-see stand," said a local trader. (dpa)