* Real down nearly over 6% over past 8 sessions * Chilean economic growth seen surging * Mexican peso lags (Updates prices) By Ambar Warrick and Susan Mathew July 12 (Reuters) - Brazil"s real rallied strongly on Monday on expectations of an economic recovery this year, leading gains across Latin American currencies, but a surge in global cases of the Delta COVID-19 variant prompted caution. The real rose 1.5% after tumbling 6.3% over the past eight sessions, in the wake of serious graft allegations related to vaccine procurement against the government. The sponsor of Brazil"s planned income tax reform said on Monday that Brazilians would pay 20 billion reais ($3.85 billion) less in taxes under a bill he plans to present on Tuesday. "Brazil has seen a genuine fall in risk premia as growth, inflation and tax revenues have all surprised positively reducing fiscal risk premia, whilst at the same time the (central bank) has been turning more hawkish. ... This should keep BRL well supported versus peers," said FX strategists at JPMorgan. But they warned that political tensions could raise the real"s risk premium. More broadly, Latam currencies will struggle to appreciate against the dollar by year-end, they said. Chile"s peso rose 0.6% as a central bank survey of analysts showed the economy is expected to expand by 16.5% in June and by 11.9% in the third quarter. Meanwhile, the government on Monday revised upwards its projection for 2021 economic growth to 7.5% from 6%. But despite expectations of a strong rebound, concerns over the drafting of the country"s new constitution have held back Chilean assets in recent months. Mexico"s peso lagged, trading flat against a dollar that gained momentum as a surge in COVID-19 cases and its infectious Delta variant raised questions about the pace and progress of economic growth. JPM strategists said the peso"s weakness against the dollar should be contained this year. They expect three more rate hikes in Mexico this year and a continued spillover of U.S. fiscal stimulus via the current account and manufacturing sector. Among stocks, Brazilian oil major Petrobras rose despite falling crude prices. The company said on Monday it expected to recover $1.274 billion on reaching an agreement regarding the Itapu field. In Argentina, the securities regulator tightened rules on some bond trades on Monday, lowering a weekly limit on trading of local and international bonds amid a wider clampdown on alternative channels used to access foreign exchange. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1327.23 0.69 MSCI LatAm 2569.57 2.3 Brazil Bovespa 127719.50 1.83 Mexico IPC 49819.55 0.1 Chile IPSA 4231.78 -0.38 Argentina MerVal 63791.61 2.277 Colombia COLCAP 1298.93 0.46 Currencies Latest Daily % change Brazil real 5.1812 1.48 Mexico peso 19.8690 -0.10 Chile peso 742.8 0.74 Colombia peso 3818.1 0.23 Peru sol 3.9539 0.12 Argentina peso 96.0900 -0.10 (interbank) (Reporting by Ambar Warrick; Editing by Andrea Ricci and Richard Chang)