Sergio Aguero netted in the 10th minute for Manuel Pellegrini's side but, after threatening to extend the lead, the club was pegged back by a resilient Saints performance.
Sergio Aguero continued his fine goalscoring form with a swift strike, finding space inside the box before side-footing Aleksandar Kolarov's low cross into the net to cap a well-worked team goal.
Despite City's first-half dominance, Southampton leveled the scores just before halftime through Dani Osvaldo. The Italian forward tricked his way towards goal before curling a stunning strike into the far corner.
Midfielder Victor Wanyama suffered a hairline fracture to his leg and right back Nathaniel Clyne damaged his pelvis in midweek, meaning Jack Cork and Calum Chambers came in as two of four changes in Pochettino's injury-ravaged side.
James Milner and Alvaro Negredo, meanwhile, were recalled to the Manchester City starting XI and the latter almost netted after six minutes, but was let down by a heavy touch after strike partner Aguero played him in on goal.
Steven Davis scored in both matches against City last season and came close to extending that run, but dragged an early shot wide before the visitors made an early breakthrough.
Samir Nasri teed up Kolarov down the left flank and the overlapping full back's low cross was clinically dispatched first time by Aguero for a 17th goal in 15 matches.
Adam Lallana was involved in much of Southampton's best work but could not bring down Chambers' lofted pass in time to avoid Milner's last-ditch clearance.
The England man and James Ward-Prowse both failed to convert a Luke Shaw cross and another dangerous delivery from the same player was headed wide by fellow full back Chambers in the 37th minute before Southampton leveled in magnificent fashion.
Osvaldo superbly brought down Davis' long pass and turned Vincent Kompany inside out to arch a shot into the far corner via the underside of the crossbar.
Nasri almost gave City a lead it scarcely deserved in first-half stoppage time, firing over after being picked out by Milner. The visitors resumed impressively as Paulo Gazzaniga got down well to thwart Aguero and Yaya Toure barreled through a congested midfield to smash narrowly wide.
Osvaldo passed up a far simpler opportunity than the one he scored from in the 53rd minute, lifting a loose ball over after Costel Pantilimon dashed out to stop the rampaging Jay Rodriguez. The pair were giving City real problems.
Pellegrini moved to reinforce his over-run midfield as holding player Javi Garcia was introduced alongside Jesus Navas in place of Negredo and Milner on the hour mark, and Aguero raced outside Jose Fonte to shoot past the far post five minutes later.
But City's Argentinean talisman was restricted to half chances thereafter and the Sky Blues could be eight points behind Arsenal when the leader arrives at the Etihad Stadium next Saturday.
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