SHANGHAI, March 15 (Reuters) - China's stocks fell sharply on Tuesday as surging coronavirus cases threatened the outlook for world's second-largest economy and the central bank dashed expectations for a cut in a key lending rate.

The Ukraine crisis also continued to weigh on sentiment, reviving worries about widening differences between Beijing and Washington as the United States raised concerns about China's alignment with Russia.

The CSI300 index fell 1.8% at the end of the morning session, while the Shanghai Composite Index lost 2.2%. The Hang Seng index and the Hong Kong China Enterprises Index both lost 3.0%.

The People's Bank of China (PBOC) said it would keep the rate its one-year medium-term lending facility loans unchanged at 2.85% from the previous operation, defying expectations for a cut.

The market selling came despite data showing China's economy perked up in the first two months of the 2022, with key indicators all exceeding analysts' expectations.

The data "shows the government’s supportive policies have started to help the economy," said Zhiwei Zhang, Chief Economist at Pinpoint Asset Management. "But the macro outlook in the next few months remains challenging. I am surprised the PBOC did not cut the MLF interest rate today."

Adding the gloom in markets were mainland China's steep jump in daily COVID-19 infections, with new symptomatic cases on Tuesday more than doubling from a day earlier to a two-year high.

China's southern technology hub of Shenzhen suspended public transport including buses and subways, prompting manufacturers such as Apple suppliers Foxconn and Unimicron Technology Corp to halt operations. The financial hub of Shanghai locked down some housing and office compounds.

"China's economy could be severely hit again," said Nomura analysts in a note. "With the much-worsening pandemic and Beijing's resolution in maintaining its zero-COVID strategy, we believe China's 'around 5.5%' GDP growth target this year is becoming increasingly unrealistic."

U.S. national security adviser Jake Sullivan on Monday raised concerns about China's alignment with Russia in a seven-hour meeting with Chinese diplomat Yang Jiechi. Washington has warned of isolation and penalties for Beijing if it helps Moscow in its invasion of Ukraine.

Tech giants listed in Hong Kong lost 2.4% after tumbling as much as 7.2% in early morning trade.

JPMorgan Chase & Co. downgraded 28 Chinese stocks listed in the United States and Hong Kong on Monday, sending the Nasdaq Golden Dragon China Index down nearly 12% overnight.

"We find China Internet unattractive on a 6-12 month view with an unpredictable share price outlook, depending on the market perception of China's geopolitical risks, macro recovery and Internet regulation risk," said JPMorgan Chase & Co. in a note.

The Hang Seng Tech Index has lost roughly 17% since last Friday, as the U.S. Securities Exchange Commission identified Chinese companies that will be delisted if they do not provide access to audit documents.

"As the Russia-Ukraine conflict continues, we believe global investors are increasingly nervous about geopolitical risks to China as more and more country and corporates impose sanctions on Russia," JPMorgan Chase & Co said.

(Reporting by Shanghai Newsroom; Editing by Sherry Jacob-Phillips and Sam Holmes)