Japhet Ruto is a journalist at TUKO.co.ke with over eight years of experience covering finance, business, and technology, providing insights into economic developments in Kenya and beyond.

After US president Donald Trump declared a 90-day suspension of global tariffs that had plummeted markets, the Nairobi Securities Exchange (NSE) and the shilling rebounded on Thursday, April 10.

Market capitalisation, a gauge of investor wealth, added KSh 34 billion, recovering over a third of the losses that investors had recorded.

Between Monday, April 7, and Wednesday, April 9, investors lost a whopping KSh 124.4 billion after Trump imposed a 10% reciprocal tariff on Nairobi.

However, the NSE recorded gains across all major indices, with the NSE 20 adding 19.51 points to reach 2138.65, the NSE All-Share Index (NASI) up 2.16 points to 125.76, the NSE 25 rising by 73.33 points to 3387.48, and the NSE 10 gaining 26.19 points to stand at 1277.04.

The biggest gainers were Sanlam (9.27%), Express (8.57%), I&M Holdings (7.82%), Kakuzi (7.06%) and Kenya Commercial Bank (6.37%).

After investors wishing to leave the local market reduced their demand for US dollars, the shilling also gained against the dollar in the foreign exchange market.

The local currency appreciated from its closing average of 129.67 on Wednesday to trade at an average of 129.42 per unit against the greenback on Thursday evening.

Geopolitical economist Aly-Khan Satchu told hat Trump was forced to soften his stance and target China, the world's second-biggest economy since it is its competitor.

"The degree of market turmoil caused by the tariffs was simply unprecedented. I believe Trump concluded it was more prudent to maintain the pressure on China while giving the markets, particularly the bond market, which is the US's weakest point, some leeway. However, I don't believe that restraining from this forward stance is so simple. Furthermore, I don't think China is ready to be the US's punching bag," he explained.

Satchu noted the 10% tariff imposed on Kenya was advantageous since its textile rivals had higher levies.

"Now that advantage is eroded, but I don’t believe investment decisions will be made at this moment on an ever-metastasising tariff scorecard," he added.

Trump suspended tariffs on Kenya and more than 70 other nations following a decline in world markets.

The 47th US president admitted his tariffs rattled markets. He initially intended to use tariffs to reorganise the global economy by pressuring foreign nations to lower their barriers to US exports and requiring manufacturers to establish a presence in the US.

But the Republican leader claimed China was disrespecting other countries, so he increased Beijing's tariffs to 145%.

Source: TUKO.co.ke