HONG KONG (REUTERS, BLOOMBERG) - Hong Kong authorities closed schools on Tuesday (Oct 12) and raised the third highest storm warning as a typhoon threatened the financial hub for the second time in less than a week.

The Hong Kong Observatory is considering raising the warning signal from No. 3 to No. 8, the third-highest level on its scale, between 4pm to 6pm, according to a statement on its website.

The move won't affect operations of the Hong Kong stock market as it closes at 4pm, though Wednesday trading depends on the cyclone's movement.

Hong Kong Exchanges and Clearing will scrap pre-market trading if signal No. 8 is in force between 7am and 9am, according to its trading arrangements. There will not be a morning session if the No. 8 warning is lowered after 9am, and no trading for the day if it's still in effect after midday.

Yantian Port in neighboring Shenzhen said it halted container pick-up and drop-off operations. Gaming hub Macau is also considering issuing the No. 8 warning between Tuesday night and early Wednesday morning, its weather office said in a statement.

At 12pm, Kompasu was estimated to be about 560km southeast of Hong Kong and is forecast to move west at about 25kmh across the northern part of the South China Sea, according to the Observatory. Kompasu's outer rainbands will bring showers and squalls to the financial hub on Tuesday night as it gradually edges closer to the coast of Guangdong.

Kompasu is the second tropical storm to affect Hong Kong in three days, after Lionrock brought flooding to some low-lying areas as it pounded the city on the weekend. Potential damage from Kompasu could be more severe than Lionrock based on its current track and intensity forecasts, Bloomberg Intelligence analyst Steven Lam wrote in a note Monday.