King Al-Sultan Abdullah has given political parties until 2 p.m. (0600 GMT) on Tuesday to put together alliances needed for a majority.
The election and the ensuing turmoil prolongs political instability in the multiracial Southeast Asian nation, which has had three prime ministers in as many years, and risks delays to policy decisions needed to galvanise an economic recovery.
The uncertainty hit the Kuala Lumpur stock market .KLSE, which fell for a second day on Tuesday. Significant election gains by an Islamist party also added to investors' fears, notably over policies on gambling and alcohol consumption.
Anwar's coalition entered negotiations with Barisan Nasional, the incumbent coalition and Anwar's longtime rival, on Monday to discuss a potential alliance.
Barisan, Malaysia's dominant political force governed since independence from the British in 1957 until 2018. Muhyiddin's conservative Malay Muslim alliance reiterated on Monday that he had majority support, though he did not identify his backers.
Anwar's multiethnic coalition won the most seats in the Saturday election with 82, while Muhyiddin's bloc won 73. They need 112 - a simple majority - to form a government.
Barisan won only 30 seats - its worst electoral performance - but will play a pivotal role in deciding who forms the government as its support is needed for both Anwar and Muhyiddin to get to 112.
It would be another astonishing turnaround in Malaysian politics if Anwar and Barisan forged an alliance: as opposition chief, Anwar has spent much of his career trying to oust Barisan.
For the 2018 election, Anwar tied up with mentor-turned-foe Mahathir Mohamad to defeat Barisan. But their alliance collapsed in 22 months, and the two have since fallen out again.
Muhyiddin's bloc includes the PAS Islamist party, which has called for sharia law.
Its electoral gains have raised fears in multi-cultural Malaysia, which has significant ethnic-Chinese and ethnic-Indian minorities following other faiths.
