KARACHI (AFP) - Shops, businesses and schools shut on Friday across Pakistan's financial capital Karachi, braced for further unrest after the murder of a politician and a night of sporadic shootings.

Manzar Imam, 42, a lawmaker from the Muttahida Qaumi Movement (MQM), a coalition partner in the federal government and the dominant political party in Karachi, was shot with three of his guards in a drive-by shooting on Thursday.

Overnight violence, linked to ethnic and politically linked tensions in Karachi, left five people dead and around 30 wounded, according to police.

Markets shut, streets were deserted and schools closed, with office attendance thin although government departments, the port and stock exchange remained open.

Hyderabad, the second largest city after Karachi in southern province Sindh, was similarly shut down and people burnt tyres to protest against Imam's killing.

It is the second shooting of an MQM provincial lawmaker in just over two years in the city, Pakistan's business centre with a population of 18 million.

The death of MQM lawmaker Raza Haider in an ambush in August 2010 sparked a fierce wave of ethnic and politically linked violence that killed scores of people.

Last year, Karachi saw its deadliest year in two decades, with around 2,000 people killed in violence linked to ethnic and political tensions, raising fears for elections due this year.