Infosys ADRs 40% spike linked to a "bizarre" technical glitch, says report

While India’s second-largest IT services company, Infosys, has rejected any material reasons for the outsized surge in its American Depositary Receipts (ADRs) on the New York Stock Exchange (NYSE) on Friday, a report by a Canada-based newspaper, The Chronicle Journal, has linked the development to a bizarre technical glitch involving ticker mapping."The "mystery" behind the move appears to be rooted in a bizarre technical glitch involving ticker mapping. In the days leading up to the surge, several prominent financial data providers—including Zacks Investment Research and MarketBeat—began erroneously identifying the "INFY" ticker as "American Noble Gas Inc." in their automated reports," it said in a report."While the financial metrics and news headlines attached to the ticker still referenced Infosys’s massive AI investments and $75 billion market cap, the name mismatch is believed to have confused automated trading algorithms. These systems, designed to hunt for "mispriced" assets or sudden momentum shifts, likely interpreted the data discrepancy as a signal to buy, creating a feedback loop that amplified the price action in the thin liquidity of a year-end Friday," the report said further.The Infosys ADRs hit a fresh 52-week high of $30 on Friday, surging 40% and thus forcing the exchange to halt trading on two instances after volatility hit the roof. The chaos began in the early part of the trading session.On Thursday, Infosys ADRs settled at approximately $19.18.The abrupt rally was short-lived as the Infosys ADRs finally settled at $20.22, up by $1.04 or 5.42% amid large volumes totalling 118.7 million.Infosys responseThe company clarified that there were no material events that required disclosure under the Sebi (Listing Obligations and Disclosure Requirements) Regulations, 2015," the exchange filing said.Read more: Infosys ADRs: Here's what company said on unprecedented 40% spike, trading pauseRipple effectThe Infosys event had a ripple impact on Wipro ADRs as well, which ended 7% higher at $3.06 after hitting the day's high of $3.09. (Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)