A touch panel includes capacitive sensing electrodes and a touch controller operates in a first operating mode to detect a touch location on the touch panel. In a second operating mode, the touch controller transmits a modulated data signal through the touch panel to an active stylus. Each electrode is driven by a line driver circuit. A control circuit selectively actuates first ones of the line driver circuits to pass the modulated data signal to corresponding first ones of the electrodes which do not pass through a region of the touch panel associated with the location of the detected touch. Simultaneously, the control circuit selectively actuates second ones of the line driver circuits, different from said first ones of the line driver circuits, to ground corresponding second ones of the electrodes which do pass through the region of the touch panel associated with the location of the detected touch.