U.S. stock index futures pointed to a rise of more than 1 pct at the open on Tuesday on signs of strength in Europe's banking system and ahead of a $22 billion initial stock offering by the Agricultural Bank of China, set to be the biggest-ever IPO.

Agricultural Bank of China, the country's No 3 bank by assets, closed the books on its dual Hong Kong and Shanghai share sale and could break all IPO records by raising more than $22 billion in what could be a key test of investor sentiment.

French banks are likely to pass Europe-wide stress tests, Bank of France head and European Central Bank Governing Council member Christian Noyer said on Tuesday, relieving some concerns about the health of the sector ahead of the tests later this month. His comments followed similar remarks from French Economy Minister Christine Lagarde.

There appears to be a decent bounce here based on a couple of risk-positive data points, said Craig Peckham, equity trading strategist at Jefferies & Co in New York. But he warned it was too early to call an end to recent heavy falls that have pushed the S&P 500 index down by about 16 percent in the last two months.

S&P 500 futures added 15 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures jumped 116 points, and Nasdaq 100 futures increased 30.25 points

At the start of a trading week shortened by the U.S. Independence Day holiday, investors will monitor the Institute for Supply Management's non-manufacturing report due at 10 a.m. (1400 GMT), as concerns have grown that an economic recovery may be slowing. Economists look for a reading of 55.0 versus 55.4 in the previous report.

The S&P 500 fell every day last week and has declined 8.3 percent since the beginning of the year. Signs of weakness in the labor and housing markets as well as a potential slowdown in manufacturing have worried investors.

Retailer Walgreen Co said June sales rose 8.4 percent to $5.67 billion. Walgreen's stock rose 2.8 percent to $27.09 in premarket trade.

A slew of research notes from brokerages also boosted shares. Goldman Sachs Group Inc rose 2 percent to $133.65 in premarket trading following an upgrade to overweight by JPMorgan, which said the company was the best in its class at managing risk.

Barclays Capital upgraded the oil service and drilling sector to positive from neutral, saying a 26-percent drop in the oil services index <.OSX> more than compensates for the impact of BP Plc's Gulf of Mexico oil spill.

The call included an upgrade for Halliburton Co to overweight from equal weight. The shares rose 2.7 percent to $26.44.

BP has approached sovereign wealth funds with a view to securing a strategic investor to fend off takeover bids while it deals with its massive U.S. oil spill, a senior United Arab Emirates source said on Tuesday. BP's New York traded stock rose 6.1 percent in premarket trading to $31.15.

(Editing by Padraic Cassidy)

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