Hong Kong  - Hong Kong prepared for a battering Friday as Typhoon Nuri neared, raising fears that the city could be in line for a direct hit.

The government issued a number 8 typhoon warning signal Friday morning as the typhoon, which killed seven people in the Philippines, headed toward southern China.

Signal number 8 is issued when average wind speeds reach 63 kilometres per hour. All government offices are to close down, as well as schools, public transport and Hong Kong's stock market, bringing the city to a standstill.

Schools closed and workers stayed home, ferry and tram services halted as winds reached 87 kph in some parts of the former British colony in the morning.

Cathay Pacific and Dragonair announced that all flights would be suspended from 2 pm (0600 GMT).

The Hong Kong Observatory said the typhoon was expected to be at its closest to Hong Kong late Friday afternoon and in the early evening.

But the typhoon, the third so far this year, arrived too late to affect the Olympic equestrian event finals staged in Hong Kong Thursday.

The observatory did not rule out the possibility of a direct hit - which would be the first since 1999.

The highest signal, number 10, was last hoisted in 1999 when Typhoon York scored a direct hit, leaving three people dead. (dpa)