FINANCIAL MARKETS : Interest-Rate Hopes Push Mexican Stocks Higher : Economy: Bolsa rises 98.97 points in heavy trading. The peso fell against the dollar, though.

Mexican stocks soared for a second day as investors grew optimistic that interest rates will fall in the government’s weekly securities auction, analysts said.

“The market is anticipating that there will be a sharp decline in interest rates,” said Jorge Suarez, head researcher at New York-based Afin Securities Inc.

Rates have increased for the past eight weeks, rising more than 28 percentage points to 59.99% last week from 31.97% in mid-September.

Traders said they expect the bank to cut short-term interest rates about 500 basis points.

Lower interest rates make shares more attractive when compared to fixed-income instruments, and they can boost corporate earnings by lowering borrowing costs.

The Bolsa index closed up 98.97 points, or 4.21%, to 2448.43, its highest since closing at 2458.59 on Sept. 25. The index also saw its largest one-day rise since it jumped 4.57% on Oct. 30.

Trading amounted to 124.2 million shares, worth 1.37 billion pesos, or $176.86 million. That is above the average daily volume of 89.66 million shares for the last three months.

Stocks rose as the peso weakened against the dollar. The peso fell 1.4% to 12.93 cents from 13.11 cents on Friday. Mexican financial markets were closed Monday as the country celebrated Revolution Day. The peso is down 8.5% so far this month and 55% since it was devalued on Dec. 20.

The peso weakened as the expectation of lower interest rates made peso-denominated securities less attractive when compared to other instruments in other markets.

“The foreign exchange had been stable in past days because having dollars had become very expensive,” Suarez said.

Monday was also the first day of trading since the government reported that the country’s gross domestic product fell 9.6% for the third quarter--more than economists had anticipated. The GDP numbers underscore the depth of Mexico’s economic recession, which began with the Dec. 20 devaluation, which caused interest rates to skyrocket.

Still, investors apparently expect the Mexican economy to start recovering in the last weeks of 1995 and to continue to do so in 1996.