PHOTOS: Worst pollution this year envelops Hong Kong
Air pollution index readings hit their highest levels this year at roadside monitoring stations in Mong Kok and Central, home to financial institutions such as HSBC Holdings and Standard Chartered, recording "severe" levels of 205 and 210, respectively.
More than half of the 11 stations in areas with less traffic recorded "very high" levels between 103 and 140.
The situation was caused as pollutants, in particular nitrogen dioxide, became trapped within the city where skyscrapers packed together stop air from circulating, a spokesman for the Environmental Protection Department said.
People with heart or respiratory illnesses, the elderly and children were advised to stay indoors as the city's iconic harbour was shrouded in thick smog and the skyscrapers of Hong Kong island were barely visible from Kowloon.
The pollution index in Beijing on Monday stood at 167, or "unhealthy" levels, according to the United States embassy, which most Chinese rely on for more accurate readings.
The Hong Kong index uses different criteria to measure pollution, so has different numerical readings.
Air pollution in Hong Kong, a former British colony which returned to Chinese rule in 1997, is a major source of worry for local citizens and foreign businesses, which increasingly see it as compromising the quality of life.
There were 322 premature deaths in Hong Kong in March as a result of adverse health effects due to air pollution, according to Hong Kong University's Hedley Environmental Index.