Mumbai, May 15 :     The Bombay Stock Exchange (BSE) sensex today tumbled below the crucial 4,000-mark to 3912.95 but clawed back to close 105 points higher at 4212.53 in a roller-coaster session. The 30-scrip index fluctuated by a massive 336 points before UTI, foreign funds and speculators covered their positions and triggered the turnaround. The smart recovery was not enough to drive away fears among operators who said the market was in for a long spell of volatility. There is growing speculation that the US Federal Reserve will hike interest rates on Tuesday in a move that could send stock markets across the globe into a tailspin. Brokers say though the markets have discounted the hike, things could turn nastier if Fed governor Alan Greenspan raises rates by over 50 basis points. 'The market expects Greenspan to raise rates by 50 basis points. That has been discounted. But, if he were to raise it above this level, then we would be heading for a freefall,' a trader said. Another potential mover this week could be the announcement of Morgan Stanley's weightage for India. There are growing expectations among brokers that the Fund will scale down its weightage for the country, even as it rates China as a better investment destination. 'If Morgan Stanley were to reduce its India weightage, then the markets are certainly due for a massive pounding,' an analyst said. The, there are mounting concerns over the domestic economy, especially the devastating drought in western India. Many fear this could stoke inflation and prevent the country from achieving the 6.5 to 7 per cent GDP growth forecast by RBI and the government. In such a scenario, some pessimistic traders say the sensex could even test 3450 levels. Earlier in the day, the sensex opened sharply lower at 4024.66 due to heavy selling by domestic operators. The decline in values were the sharpest in the ICE shares with majors like Zee Telefilms locked in their lower-end circuit filters. The fear of a US rate hike drove the index down to the day's low of 3912.95. Later, it flared up to its intra-day high of 4249.45 before closing at 4212.53 as against last Friday's finish of 4107.14, netting a rise of 105.39 points or 2.57 per cent. This is the first time in 11 months that the sensex dipped below 4000-mark. It had touched a low of 3876.56 on June 16, 1999. UTI is believed to have made purchases to the tune of Rs 200 crore. Operators were also seen enlarging their positions in line with short-covering on the NSE with low badla rates of about six per cent and a sharp fall in net outstandings, which stood at Rs 1,628 crore. Zee Telefilms was the most actively traded scrip with a turnover of Rs 567.50 crore. The share gained Rs 45.20 to close at Rs 526.00. On the CSE, a technical fault in its online trading system led to utter confusion and massive losses to brokers as transactions were concluded at Friday's post closing rates. Normally a bid placed in the post closing session or for that matter in normal session also, if not executed on the same day, stands as automatically cancelled on the subsequent trading day. Those who had made bids for purchasing on Friday in the post closing session had to suffer huge losses as their bids were not cancelled. The rupee also staged a turnaround after dipping below 44 against the dollar. It was rescued to 43.96/98 at the close by State Bank's dollar sales after it plumbed 44.03/06 earlier in the session. The currency was still weaker by two paise over Friday's finish of 43.94/96.