The Observatory, which raised the No. 8 signal late on Monday, said it expected it to stay in force "for some time" this morning even though Kalmegi is moving away from the city.
There will be no trading in the morning if the typhoon signal remains at 8 or higher at 9 a.m. local (0100 GMT), with trading suspended for the whole day if storm signal 8 is still up at noon.
Schools, businesses and non-essential government services will also close while storm the signal 8 remains.
Flights in and out of Hong Kong Airport were delayed, affecting thousands of passengers, with the impact expected to last well into Tuesday morning.
Typhoon Kalmaegi brought gusts of up to 125km/h (78 mph) in the past hour as it swept past on its way towards China's Guangdong province and Hainan Island after it plunged northern parts of the Philippines into darkness and inundated farmland.
At 6 a.m., Typhoon Kalmaegi was centred about 380 kilometres (236 miles) southwest of Hong Kong and was forecast to move west-northwest at about 30 kilometres per hour (19 miles per hour) towards the Chinese resort island of Hainan.