(Updates with bourse close)

By Alexia Vlahos

SANTIAGO, May 4 (Reuters) - Chilean stocks and the peso currency surged on Monday, mirroring gains in other global markets as investors see optimism the economic crisis will recover faster-than-expected, traders said.

The IPSA .IPSA leading share index closed 3.19 percent firmer at 2,756.07 points, according to preliminary closing data, while the all-market IGPA index .IGPA closed 2.46 percent firmer at 13,086.94 points.

The IPSA is now up 16 percent year-to-date.

"Investors are feeling confident that the financial crisis may be coming to an end," said Pamela Auszenker, head of research at the Bci brokerage. "Foreign investor risk aversion has fallen, so they are entering slightly riskier markets."

On Wall Street, the Dow Jones industrial average .DJI closed 2.61 percent firmer, as investors bet the government's stress tests on the financial sector won't force banks to raise as much capital as originally thought and better-than-expected housing data boosted hopes the economic slump was abating.

Shares in industrial conglomerate Copec COP.SN, the most heavily weighted stock on the bourse, rose 3.32 percent to 5,992.80 pesos.

Banks were also higher. Leading private bank Santander Chile STG.SN closed 5.51 percent firmer at 20.89 pesos, while Banco de Chile CHI.SN rose 2.58 percent to 35.78 pesos. Corpbanca COB.SN closed 3.03 percent firmer at 2.72 pesos each.