HONG KONG (AFP) - A 190-metre long cargo ship sank off Hong Kong on Wednesday in a powerful typhoon that generated towering waves and forced much of the city to shut down, after leaving six dead in the Philippines.

The 21 crew of the bulk carrier Trans Summer abandoned ship as the vessel tipped on its side and sank 80km south-west of Hong Kong, triggering a rescue that saw them plucked from the heavy seas by two helicopter teams and a passing ship.

"The waves were 10 to 15 metres high. The wind was 90 kilometres per hour," said Samuel Yip of the city's Flying Service, a pilot who took part in the operation.

"The air crew saw the ship was leaning to the left side by about 20 to 30 degrees and started to sink when it tilted almost 90 degrees," he told AFP.

Typhoon Utor left at least six dead when it swept across the Philippines on Monday, flattening houses and causing flash floods and landslides.

As it headed for mainland China, it barrelled past Hong Kong where it forced the closure of financial markets, schools and businesses, and disrupted hundreds of flights.

Gusts of more than 100kmh were recorded, with rain lashing down, as the Hong Kong Observatory hoisted a "Number 8" storm warning in the early hours of Wednesday - the third-highest level.

As the typhoon skirted the city about 240km to the south-west, the observatory downgraded the warning in the afternoon to "Number 3", indicating strong winds.

The Airport Authority said almost half of the day's flights were disrupted, with 118 cancelled and another 320 delayed.

Ferry services to outlying islands and mainland China were halted in the morning, stranding passengers at various terminals.

A government spokesman said six people were treated in public hospitals for storm-related injuries and there were six cases of minor flooding.

Overnight the government opened 17 temporary shelters, with dozens of people seeking refuge.

The city's streets were quiet for much of the day, with many workers staying home as businesses and schools were shuttered.

But as the storm passed more people began venturing out, umbrellas hoisted, as the city returned to normal.

However, the Hong Kong stock exchange had already cancelled Wednesday's session and schools remained shut for the afternoon.

Utor made landfall near Yangjiang in China's Guangdong province and was forecast to move northwest at about 14kmh inland, the observatory said.