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BRASILIA, May 8 (Reuters) - Brazil's stocks and currency rallied on Friday, following global markets higher and as Citigroup raised its recommendation on the country's stock market to overweight from neutral.

Sao Paulo's main Bovespa stock index .BVSP jumped 2.67 percent to 51,395.99 points, after tumbling 2.8 percent in the previous session. The index rallied 8.7 percent this week -- the biggest weekly gain since early February.

Wall Street closed sharply higher as results of stress tests carried out on banks as well as monthly jobs data fueled hopes the worst is over for banks and the economy.

Citigroup said Brazil's market was its top pick in Latin America and raised its year-end target for the index to 60,000 from 55,000 on an improved outlook for local interest rates, the national currency and the global economy.

Brazil's currency (BRBY: Quote, Profile, Research), the real, strengthened 1.8 percent to 2.07 per dollar, continuing to benefit from increased investor risk appetite.

The central bank bought dollars on the spot foreign exchange market on Friday afternoon for the first time in eight months, a possible sign that it wants to prevent the currency strengthening past 2.0 per dollar.

The currency has surged 13 percent since the beginning of the year and gained 18.2 percent since touching a two-month low in early March.

Oil giant Petrobras (PETR4.SA: Quote, Profile, Research) was the biggest weighted gainer in the Bovespa, buoyed by higher oil prices. Petrobras jumped 3.19 percent to 33.00 reais.