The Chinese special administrative region on Friday had the highest hourly rainfall since records began 140 years ago.
Hong Kong Observatory reported rainfall of 158.1mm between 11pm on Thursday and midnight on Friday.
The weather bureau issued the highest "black" rainstorm warning and said more than 200mm was recorded on Hong Kong's main island, Kowloon and the northeastern part of the city's New Territories since Thursday night.
The trough of low pressure associated with the remnant of Typhoon Haikui has brought torrential rain to the coast of Guangdong since Thursday, the weather bureau said. Extreme conditions are expected to last until at least midday on Friday.
Hong Kong's stock exchange will not open on Friday morning if the black rainstorm warning is still in place at 9am, the exchange said.
City leader John Lee said he was very concerned about the severe flooding in most parts of the territory and had instructed all departments to respond with "all-out efforts".
Videos circulating on social media showed streets turning into raging rivers, while one clip showed water gushing down an escalator into a swamped subway station.
The city's cross harbour tunnel, one of main arteries connecting Hong Kong island to Kowloon, was also inundated with water, while photos showed a waterlogged shopping centre in the Chai Wan district.
Hong Kong's MTR Corp which operates the city's rail network said at least one line was shut while others were operating at delayed intervals.
All schools have been suspended on Friday due to "extreme conditions caused by extensive flooding and serious traffic disruption," the government said.
It appealed to employers to observe work arrangements normally used for the strong wind signal 8, which brings the city to an effective standstill with offices and stores shut.Â
