Infosys ADRs: 50% Surge and Halt Explained (2025 Glitch)

A Market Stunned by a Phantom Surge

On the morning of December 19, 2025, Wall Street witnessed a bizarre and unprecedented event involving one of India's most respected technology companies. American Depositary Receipts (ADRs) of Infosys (NYSE: INFY) inexplicably skyrocketed by nearly 50% within minutes of the opening bell, jumping from a previous close of $19.18 to a high of$30.00. The move, devoid of any fundamental news from the company, triggered a series of "Limit Up-Limit Down" (LULD) volatility halts on the New York Stock Exchange. The event left investors and analysts scrambling for answers, highlighting the fragile connection between domestic and foreign equity markets and the growing influence of automated trading systems.

Anatomy of a Technical Glitch

The chaos began around 10:15 AM ET, apparently sparked by a critical data error. Investigations suggest the root cause was a technical glitch in ticker mapping. Several prominent financial data providers had erroneously identified the "INFY" ticker as "American Noble Gas Inc." in their automated feeds. While the associated financial data remained correct for Infosys, this name mismatch is believed to have confused high-frequency trading (HFT) algorithms. These systems, programmed to detect and act on market anomalies and momentum shifts, likely interpreted the data discrepancy as a massive mispricing event, initiating a cascade of buy orders that fueled the vertical price surge.

The Peril of the Time Zone Gap

The situation was exacerbated by the 10.5-hour time difference between New York and Bengaluru. With the Indian markets already closed for the day, Infosys management could not issue an immediate clarification to quell the speculation in the US. This communication vacuum allowed the erroneous price action to persist unchecked. The incident underscores a recurring vulnerability in ADR trading: price discovery in the US can become completely detached from the fundamental reality of the company's home market. For a brief period, a data error valued Infosys, an $80 billion company, as if it had made a revolutionary discovery overnight.

A Tale of Two Markets

The most striking aspect of the event was the massive arbitrage gap it created. While INFY ADRs were surging in New York, the underlying shares on the National Stock Exchange of India (NSE) had closed with a modest 0.7% gain. This disconnect defied financial logic, which dictates that an ADR and its underlying share should trade in parity, adjusted for the exchange rate. The incident served as a stark reminder that ADRs are not just proxies for foreign stocks; they are separate instruments with their own unique liquidity and risk dynamics, susceptible to market structure flaws.

Winners, Losers, and Sector-Wide Ripples

The phantom surge had real financial consequences. Retail investors who chased the momentum and bought near the $30 peak suffered significant losses when the price inevitably corrected after trading resumed with corrected data. Conversely, some HFT firms that capitalized on the initial milliseconds of the move likely secured substantial profits, though these trades are now under regulatory review. For Infosys, the event poses a reputational challenge, as such volatility can deter conservative institutional investors who rely on ADRs for stable access to foreign markets. The glitch also cast a shadow over other Indian ADRs, with Wipro (NYSE: WIT) and ICICI Bank (NYSE: IBN) experiencing brief sympathy spikes as algorithms applied the perceived trend across the sector.

Broader Dangers of the ADR Structure

The Infosys halt is not an isolated incident but a symptom of the growing pains in a globalized, algorithm-dominated market. It highlights the inherent information asymmetry risk in ADRs. News or data errors that surface during US trading hours, when the home market is closed, can lead to extreme price gaps, leaving US investors vulnerable. This event, combined with a similar "mystery" drop in HDFC Bank's ADR earlier in 2025, points to a systemic issue in how cross-border data is synchronized and verified.

Regulatory Scrutiny and the Path Forward

In the aftermath, the Securities and Exchange Commission (SEC) and the NYSE are expected to launch a thorough investigation. The review will likely focus on the role of third-party data providers and the safeguards for HFT algorithms. There are growing calls for stricter "kill switches" and more robust data verification protocols to prevent a single point of failure from causing market-wide disruption. For their part, companies like Infosys may need to establish 24/7 communication channels to address market-moving events regardless of time zone. In the long term, this may accelerate a trend of sophisticated investors moving away from traditional ADRs toward direct investment in local markets to mitigate these structural risks.

Investor Outlook and Key Takeaways

The December 19 Infosys event is a crucial case study on the risks of modern trading. It proves that even blue-chip stocks are not immune to the complexities of cross-border listings and data integrity failures. The primary takeaway for investors is to exercise caution with ADRs, especially around market open. Using limit orders instead of market orders can provide a crucial layer of protection against sudden volatility spikes. The incident has firmly established that in the world of foreign ADRs, the price on the screen is not always a reflection of fundamental value.