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

The Mexican peso and stocks gained strength Tuesday while interest rates fell, confounding pessimists who thought worse-than-expected economic data released over the weekend would cause markets to fall.

Mexico’s financial markets were closed Monday in observance of a national holiday. Rising interest rates and the sinking peso have in recent weeks shaken financial markets’ confidence that Mexico’s current leadership can resolve the economic crisis any time soon.

But the peso closed stronger Tuesday at 7.74 to the dollar, an improvement from Friday’s close of 7.78 pesos. The most widely followed Mexican stock index closed at 2,448.43, a 4.21% increase.

And interest rates on the 28-day cetes, the benchmark short-term government note that is akin to U.S. treasury bills, fell to 54.74% at the weekly Tuesday night auction, down from 59.99% the week before, reversing a steady climb that began in September. Many business and consumer loans are tied to the cetes rate.

Some market observers expected the worst after the government late Friday night said the gross domestic product, or sum total of goods and services produced in Mexico, during the three months ended September fell 9.6% in comparison with the same three months in 1994.

While the drop was not as steep as in two previous reporting periods, the fall was worse than economists had projected and reflected Mexico’s deepening recession.

The figures also cast doubt on whether the government could deliver on its forecast for a 1996 economic recovery of 3% growth.

But analysts said the markets may have been encouraged by foreign trade data released Monday that showed Mexico ran up a trade surplus of $6.2 billion for the first 10 months of 1995, a dramatic turnaround from the $15.2 billion deficit for the same period in 1994.

Mexico’s trade deficit in 1994 was a primary cause of last December’s peso devaluation and ensuing economic crisis, which in turn led to a $50 billion bail-out package promised by the United States and other international lenders. So far, Mexico has received about half the funds promised it.