STRONG profit-taking prompted by lower overnight prices in London and mainland official Lu Ping's implied criticism of Governor Chris Patten deflated the stock market yesterday after three days of strong gains. The Hang Seng Index, which had hit two record highs and breached the 7,000-point mark for the first time this week, closed down 103.47 points at 7,005.29. Turnover was $4.76 billion. Brokers said they were not surprised by the correction because the index had climbed too far, too fast with a 5.4 per cent jump from Tuesday to Thursday. ''The market was looking for a consolidation,'' said Barings Securities director James Osborn, who added that there was still positive market momentum because the May index futures closed at a 74.71-point premium to the cash market. Crosby Securities dealing director Willie Chau said the decline was supported by some institutions which took the excuse to sell following the remarks from Mr Lu, director of the Hongkong and Macau Affairs Office. The correction became abundantly clear during early morning trading as the index fell 134.92 points to an intra-day low of 6,973.84 about 15 minutes after the market opened. Brokers said the sharp drop was caused by profit-taking on Hongkong counters in London and Mr Lu's statement that any attempt to internationalise Hongkong issues would only complicate Sino-British talks over the territory's future. After a rebound to 7,035.83 points, the index fell below the 7,000 mark to close at 6,996.63 for lunch. In the afternoon, rumours that the Sino-British Joint Liaison Group would meet to talk about financial arrangements for the Chek Lap Kok airport helped the index bounce back to 7,005.29. Hongkong Land was the most heavily-traded stock with a turnover of $191.49 million as investors reacted to rumours that the company had sold Exchange Square III to Cheung Kong or mainland investors. The stock fell 30 cents to $15.20 following sharp increases on Wednesday and Thursday. However, Mr Li Ka-shing told reporters yesterday that Cheung Kong was not interested in Exchange Square III or Hongkong Land shares. Profit-taking affected Cheung Kong, which fell 50 cents to $27 on a turnover of $189.2 million. Brokers said all the sellers were taken out at $27.10, indicating there was still strong support for the stock. There continued to be a lot of interest in the property sector, with Sun Hung Kai Properties and Hysan Development heavily traded. Sun Hung Kai was down 25 cents to $38.75 while Hysan gained 60 to $16.50. Second-line property counters Magnificent Estates and Pokfulam Development post the biggest gains. Magnificent climbed 17.2 per cent or five cents to 34 cents while Pokfulam jumped 16.8 per cent or 75 cents to $5.20. The biggest drop was posted by Kader Investment, which fell 9.6 per cent or $1.10 to $10.30.