Defense and construction stocks led the gains as the South Korean stock market advanced on Monday, with the KOSPI index closing 0.7% higher at 6,299.66 points.

Monday's rise came after a record-breaking rally on Wall Street eased concerns about interest rate hikes, following seven consecutive weeks of declines for the index.

"This week, earnings reports from overseas semiconductor and artificial intelligence-related companies are expected to alleviate worries about peak demand for AI and memory chips," said Han Ji-young, an analyst at Kiwoom Securities. "After last week's heavy sell-off in chip stocks, this will help improve foreign capital flows."

Among heavyweight stocks, Samsung Electronics fell 0.43%, while SK Hynix declined 0.14%.