US-listed shares of Infosys shot up as much as 40% within minutes of the market opening on Friday, briefly adding tens of billions of dollars to the Indian IT major’s market value. The sudden surge pushed the American Depositary Receipts (ADRs) to a 52-week high of $30 and forced the New York Stock Exchange to halt trading due to extreme volatility, according to ET. The sharp move took place during a low-liquidity holiday session and was not linked to any new announcement from the company.Why did the rally raise eyebrows?The speed and scale of the rise caught traders off guard because there was no obvious trigger. Analysts pointed out that such extreme swings are unusual for a large, widely tracked stock like Infosys. The trading halt itself highlighted how fragile markets can become when liquidity is thin and automated systems dominate activity.Was a short squeeze involved?One of the main explanations doing the rounds was a possible short squeeze. This happens when investors betting against a stock are forced to buy it back quickly as prices rise, pushing the stock even higher. Traders quoted by Moneycontrol said a major lender may have recalled 45–50 million Infosys ADR shares that had been lent out. That number is far higher than the usual daily trading volume of about seven to eight million shares. In a thin market, such a recall could have forced short sellers to rush for shares, accelerating the spike.Did a technical glitch play a role?Another theory is centred on a data error. According to The Chronicle Journal, several market data platforms mislabelled the Infosys ticker ‘INFY’ as ‘American Noble Gas Inc’. While the company name was wrong, the financial data and news attached to the ticker still referred to Infosys, including details about its AI investments and $75 billion market value. This mismatch may have confused algorithmic trading systems, triggering automated buying and adding fuel to the rally.Did the sector backdrop help?Indian IT stocks had received some support after Accenture posted better-than-expected results. However, analysts said this alone could not explain such a dramatic move in Infosys ADRs, as per ET.Infosys clarified that there was no material reason behind the volatility. In an exchange filing, the company said the ADRs saw sharp price movements on December 19, triggering two volatility trading pauses on the NYSE, but added that there were “no material events that require disclosure” under listing regulations.Whether driven by short covering, a technical glitch or both, the episode underlines how quickly markets can spiral when low liquidity, automated trading and data errors collide — even for blue-chip stocks.
