0738 GMT - High government bond yields pose challenges to equity markets, says Charu Chanana, Saxo Markets chief investment strategist, in a note. Higher yields ask the question: How much are investors will be willing to pay for stocks when safer assets are offering more attractive returns? Yields also matter because they raise the discount rate used to value future earnings, putting pressure on equity multiples, she notes. "Companies with strong free cash flow, low leverage and limited refinancing needs are better placed to keep investing and returning capital even when borrowing costs stay high," she says. The strategist thinks quality financials, energy, commodities and defensive sectors should prove more resilient.