Skip to content
Market Trends & Analysis — finance — business — technology

Explainer: Why Infosys ADRs jumped 40% and why the NYSE halted trading

Infosys ADRs surged 40% on the NYSE, hitting a 52-week high of $30 and triggering two trading halts. Analysts cite a combination of a short squeeze, automated trading glitches, and low holiday liquidity. Infosys clarified there were no material developments behind the sharp spike.

,   and  Administrator
1 min read
there was a room in which people are sitting in the chairs,in front of a table looking into the...
there was a room in which people are sitting in the chairs,in front of a table looking into the laptop and doing something,beside them there are many flee xi in which different advertisements are present which different text.

Explainer: Why Infosys ADRs jumped 40% and why the NYSE halted trading

Infosys American Depositary Receipts (ADRs) surged by as much as 40% within minutes of Friday’s opening bell. The sudden spike briefly added tens of billions of dollars to the company’s market value before trading was halted. Infosys later confirmed no major news had triggered the rally.

The dramatic price swing began shortly after markets opened. Multiple brokers, including Wells Fargo, recalled 45-50 million lent Infosys ADR shares, forcing short sellers to cover positions quickly. This rush to buy back shares likely intensified the upward pressure on the stock.

A technical error may have worsened the situation. Reports suggested a mislabelled ticker could have triggered automated trading systems, pushing prices even higher. The New York Stock Exchange (NYSE) stepped in and temporarily suspended trading due to the extreme volatility. The rally unfolded during a low-liquidity session, meaning fewer trades were needed to move the price sharply. While Indian IT stocks had edged up after Accenture’s strong quarterly results, this alone did not account for the scale of Infosys’ spike. The company itself ruled out any material developments behind the surge, leaving traders to point to the short squeeze and potential data errors as key factors. The incident highlighted how rapidly markets can destabilise when short positions, technical glitches, and algorithmic trading overlap. Brokers’ recall of borrowed shares added fuel to the volatility, creating a perfect storm for the sudden price jump.

Trading resumed after the NYSE’s pause, but the episode left questions about market stability. The surge had no clear link to company fundamentals, instead driven by short covering and possible trading errors. Regulators and investors may now scrutinise how such extreme moves can be prevented in future.

Read also:

Related

Latest