New Delhi, Dec. 20 -- Trading in Infosys' American Depository Receipts (ADRs) on the New York Stock Exchange (NYSE) was briefly halted on Friday (December 19) after the stock surged nearly 40% in early trading, an unusually sharp move for a large-cap IT services company with no company-specific announcement.

Market participants say the sudden spike was driven by a short squeeze, a technical market event that forced traders betting against the stock to rapidly buy shares, pushing prices sharply higher.

A short squeeze happens when a stock that many investors have bet against (by short selling) suddenly rises in price instead of falling. This forces those investors to buy back the stock quickly to limit their losses, which in turn pushes ...