Hong Kong's observatory issued the first typhoon signal number eight of the year, the third highest of a four-stage storm warning system indicating gales or storm-force winds were expected, on Tuesday night.

But the warning was lowered to strong wind signal number three at 11.15 am (0315 GMT), as wind speeds dropped to 41-62 kilometres per hour.

"The public should remain on the alert as occasional gales continue to affect the western part of the territory and over offshore waters," said a spokesman for the observatory.

Fengshen, literally meaning the God of Wind, has killed more than 1,000 people in the Philippines and took a surprise turn towards the southern Chinese city Tuesday night.

The storm had initially been expected to swing into the South China Sea from the Philippines and track northwards to Taiwan but instead veered northwest, the observatory said.

The storm, at about 60 kilometres northeast of Hong Kong on Wednesday, is forecast to weaken and move north or north-northwest at about 14 kilometres an hour further into China's Guangdong province.

The observatory said it was heading towards Shenzhen, just over the border from Hong Kong, but had not caused any major damage.

Tourists were stranded in Macau last night after ferry services between Hong Kong, Macau and Shenzhen were halted.

Some taxi drivers in Hong Kong took the opportunity to raise fees as people began the after-storm scramble to work.

Hong Kong's stock market was due to reopen at 2.30 pm (0630 GMT).

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