Infosys ADR volatility rattles markets: What caused the sudden spike and why it faded quickly

Infosys’ American Depository Receipts (ADRs) witnessed an unusual bout of volatility on Friday after surging nearly 40% on the New York Stock Exchange (NYSE)prompting a temporary halt in trading. The sharp move immediately drew attention across global markets, especially as there was no fresh company-specific announcement from Infosys to justify the spike.

Market participants widely believe the move was driven by a technical pricing anomaly in the ADR rather than any fundamental trigger. Traders noted that the ADR briefly jumped to the $25–26 rangean abnormal move given the absence of earnings updates, guidance changes, or deal-related news from the company.

The sudden price jump is said to have activated algorithmic and momentum-based tradeswhich tend to amplify sharp movements in low-liquidity instruments like ADRs. Infosys, being a heavyweight in the Indian IT space, often sees its ADR movements influencing offshore sentiment, and the spike briefly spilled over into Gift Nifty futurescreating short-lived optimism.

However, the excitement did not last long. The NYSE halted trading in Infosys ADRs due to excessive volatility, and once trading resumed, prices reverted closer to normal levelsindicating that the earlier surge was not sustainable.

By later updates and into early cues for December 20, Gift Nifty gains had moderated sharplytrading in the 25,900–26,000 zonesuggesting only a 0.2–0.6% premium over Nifty’s previous close near 25,850–25,950. This reinforced the view that the ADR spike had limited real impact on broader market sentiment.

Market experts cautioned investors against reading too much into such ADR-driven moves, noting that technical mismatches, low volumes, and data glitches can sometimes cause exaggerated price action in overseas listings that do not reflect the underlying stock’s true value.

Overall, the Infosys ADR episode serves as a reminder that short-term overseas price distortions can occur, but they often correct quickly without leaving a lasting imprint on domestic markets.

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