Troops patrol Pakistan's Karachi after ethnic clashes

The bloodshed in the southern city comes as troops fought Taliban militants to regain control of a valley just 100 km (60 miles) northwest of the capital Islamabad.

"We have heavy deployment of troops across the city, and they have been told to go to any extent to control the situation, including shoot at sight orders for miscreants," a spokesman from the paramilitary Rangers said.

"The situation is under control now, but keeping in view the incidents of yesterday, traffic is pretty thin," he added.

Karachi has a long history of ethnic, religious and sectarian violence, but the timing of the latest clashes will add to concerns that nuclear-armed Pakistan is becoming more unstable and insecure.

Police put the death toll from Wednesday's violence at 24, but newspapers reported numbers as high as 31. Dozens of people were wounded in the violence.

Public transport was thin, while authorities had ordered all educational institutions to close.

The main Karachi Stock Exchange 100-share index was down 1.69 pct by 10:15 a.m. (0415 GMT).

Dealers said activity was likely to remain thin as investors would be cautious in the aftermath of the violence, with confidence already suffering from mounting levels of insecurity in the country.

The violence in Karachi resulted from tensions between Mohajirs, Urdu-speaking people who migrated from India after creation of Pakistan in 1947, and Pashtuns from the northwest.

The teeming city of more than 16 million is home to the largest concentration of  Pashtuns outside of the North West Frontier Province (NWFP), where a Taliban insurgency is raging.

Tension has been building as Mohajirs, who dominate the city's administration, have become suspicious of a Pashtun community that has strong Islamist sympathies, following the surge in militancy in the northwest.

High profile militant attacks in Lahore, the capital of the central province of Punjab, in March, put Karachi on guard and fuelled ethnic tensions.