Typhoon Hato smashed into Hong Kong Wednesday with hurricane force winds and heavy rains in the worst storm the city has seen for five years, shutting down the stock market and forcing the cancellation of hundreds of flights.

The weather observatory raised the storm warning to the city's maximum Typhoon 10 signal for the first time in five years as Hato approached.

It was only the third time the Typhoon 10 warning has been issued since 1997, when the former British colony was handed over to China.

The storm passed as close as 60 kilometres (37 miles) to Hong Kong and made landfall at noon (0400 GMT) in the southern mainland Chinese city of Zhuhai.

Thousands of people were evacuated Tuesday in parts of south China in preparation for the typhoon's arrival, the official Xinhua news agency said.

In Hong Kong, the storm sent metres-high waves crashing into shorelines with flooding knee deep in some areas.

Gusts of up to 207 kilometres per hour brought flying debris, tearing down trees and scaffolding and breaking construction cranes. Shops and homes taped up their windows to protect them from shattering but a number of panes from office building skyscrapers were smashed.

Fallen trees cut off roads to parts of the territory, with the city's popular Victoria Park covered in a mass of strewn branches.

"I was on my balcony in the village of Yuen Long when a tree literally flew past my house," said Dave Coulson from the rural northwestern New Territories, who added he was having frequent power cuts.

Normally packed streets were eerily empty as the storm reached its height, aside from a few who tried to battle through the winds.

Some ventured out with cameras to snap and video the typhoon.

One Lohas Park resident had brought his young daughter down to experience the weather.

"I came down here to feel the winds," he told AFP.

The government said 34 people had gone to hospital seeking medical treatment related to the typhoon. Around 280 people were taking refuge in temporary shelters.

Hong Kong's flagship carrier Cathay Pacific said almost all its flights leaving before 5:00pm (0900 GMT) Wednesday would be cancelled, with Hong Kong Airlines following suit.

Authorities said 450 flights had already been cancelled by late morning.

Ferries were suspended as was the city's airport express train line, while the metro rail and buses operated on a limited service.

As the storm moved on, the observatory lowered the warning signal to a Typhoon 8 in the afternoon.

As the storm moved west, residents and local media reported severe flooding in the neighbouring gambling enclave of Macau, with Apple Daily showing images of people swimming in the streets.

The Venetian mega-casino was running on back-up power and without air conditioning, said one source with knowledge of the situation.

Residents took to social media to complain about city-wide power and mobile phone network outages.

"The electricity was out, and the mobile network was down," resident Brian Chan, 31.

The government confirmed power had gone down in Macau and outlying islands.

Water supply was also limited, authorities said, and 50 flights cancelled from its international airport.

Hong Kong is regularly besieged by typhoons between July and October, but direct hits are rare.

The city saw its strongest storm in 1962 when the eye of typhoon Wanda passed over and gusts of 284 kilometres per hour were recorded.

It killed 130 people and destroyed thousands of residential huts, leaving 72,000 people homeless.

Since then, Hong Kong has adapted to typhoons, including making sure its highest commercial skyscrapers can sway in the wind. The extensive lockdown procedures mean the storms rarely cause deaths.

The last time the Typhoon 10 signal was raised in Hong Kong was for Typhoon Vicente in 2012.