* Weak loans likely reflect fading of govt stock rescue
* Bond financing rebounded sharply to highest level since 2014
* Loosening bond market restrictions beginning to have an impact (Adds analyst quote, context on bond financing)
By Nathaniel Taplin
SHANGHAI/BEIJING, Sept 11 (Reuters) - Chinese banks extended a smaller-than-expected 809.6 billion yuan ($127.04 billion) of new loans in August as the impact of the government's massive stock market rescue on the financial system faded.
Economists polled by Reuters had forecast new bank lending in August would pull back sharply to 900 billion yuan from 1.48 trillion yuan in July, the highest monthly reading since 2009 that economists say reflected a Beijing orchestrated programme to pump billions into equity markets to avert a full-blown crash.
Broad money supply (M2) in August rose 13.3 percent year-on-year, equal to July's 13.3 percent. Economists had predicted 13.2 percent growth.
"August new bank lending eased to normal after last month's surge and M2 stayed at relatively high levels, indicating the central bank kept its loosening monetary policy stance to support the struggling economy," said Zhou Jingtong, analyst at the Bank of China in Beijing.
Although stock markets are now showing signs of steadying following a frenetic round of tough measures by Beijing, analysts say economic growth is weakening and data points to the need for further fiscal and monetary stimulus.
Activity data for August, including industrial output and retail sales, is due to be released on Sunday.
Economists say that loans extended to non-bank financial institutions skyrocketed in July as Beijing moved to support the stock markets. The same measure fell in August.
Mark Williams, chief China economist at Capital Economics in London, said cutting through the lending data to focus on the non-financial sector provided a small shoot of optimism. On that basis, the outstanding value of loans rose 13.7 in August from a year earlier, similar to July's pace.
"This is the highest rate of lending growth since mid-2014, Chinese New Year distortions aside," he wrote in a note to clients.
Total social financing, a broader measure of net new credit, rose to 1.08 trillion yuan ($169 billion) in August from 718.8 billion yuan in July.
Rises in corporate bond financing and trust loans led the increase, suggesting Beijing's recent decisions to loosen issuance requirements for corporates including local government financing vehicles and project finance vehicles were beginning to have an impact.
On the year, net corporate bond financing rose 48.7 percent, below July's 72.8 percent rise but stronger than in the first half of the year, when bond issuance fell outright on the year.