Violence broke out, on Wednesday, at Ogbese in Akure North local council of Ondo State, following an alleged clash between Fulani and Hausa traders.
Many people were reportedly injured in the clash, with goods destroyed and shops set alight.
Several witnesses said the fight started on Tuesday night at the popular Ogbese market between the two northern tribes.
Ogbese is densely populated with traders dealing in local food and crops brought mostly from the North.
A witness who did not want her name published said that one person was feared killed in the clash, which turned into a full-blown crisis in the early hours of Wednesday.
“In fact, several shops have been razed (burnt) as a result of the bloody clash as I speak with you,” she said via the telephone.
When contacted, the police spokeswoman in the state, Funmilayo Odunlami-Omisanya, denied the claim.
“The police only got a report that about eight shops were razed by fire at midnight with accusing fingers being pointed at a particular extraction,” Ms Omisanya explained, adding that investigations are ongoing regarding the clash.