- Infosys reported no undisclosed developments after a sharp ADR rally on NYSE
- The ADR price surged 56%, reaching a 52-week high before two trading halts occurred
- The company issued a notification to clarify and avoid speculation among investors
Infosys said it had no undisclosed developments after a sharp rally in its American Depositary Receipts led to two trading halts on the New York Stock Exchange on Friday.
The Bengaluru-based software developer moved to calm investors after a sharp jump in its American Depositary Receipts on the New York Stock Exchange triggered two volatility halts on Friday. The ADRs surged by 56% and briefly reached a 52-week high of $30 before trading paused under the exchange's limit-up, limit-down mechanism.
The clarification aimed to avoid speculation and noted it would continue to follow the regulations, the company said in a notification to the exchanges.
Trading resumed after the pause and the ADRs later surrendered most of the gains. Brokers had earlier flagged the unusual spike. Analysts assessed potential technical factors behind the swing.
The move could have stemmed from a technical error or a short squeeze and called for more clarity, Kranthi Bathini of WealthMills Securities told NDTV Profit.
'Psychological Safety' A Key Factor In AI Initiatives For 83% Business Leaders, Says Infosys-MIT ReportShort squeezes occur when investors betting on a decline close losing positions by buying shares, which can accelerate price increases. Infosys' ADR volume touched 3.3 million at the peak. Its relative strength index was 85 during the spike, showing heavy demand for the stock. On a yearly basis, the ADR was flat.
Infosys shares in India closed 0.7% higher at Rs 1,638 on the NSE. Wipro's ADRs also rose more than 7% to $3.08. Its shares in Mumbai ended 0.2% higher at Rs 264.35.
Infosys, LTIMindtree, Birlasoft & More: Top Stocks To 'Buy' In IT Space For Long-Term Gains — Check Full ListWatch LIVE TV, Get Stock Market Updates, Top Business, IPO and Latest News on NDTV Profit.