The benchmark Korea Composite Stock Price Index (KOSPI) rose 1.21 percent to close at 932.70.
But caution about the impact of a surging South Korean won on local exporters tempered gains, analysts said.
"The big story this week for financial markets is the G7 meeting," said Chu Hee-yeop, an equity strategist at Dongwon Securities.
"If the won breaks the 1,000-level per dollar, the psychological impact of going from four figures to three could have very negative consequences for the stock market," he added.
US crude oil prices were 1.29 percent lower in late Asia trade, quoting around $46.57 a barrel, after the Organisation of Petroleum Exporting Countries agreed on Sunday not to cut oil production.
Dealers were also relieved after Iraq's election passed without any major damage to the country's oil infrastructure.
South Korea, the world's fourth-biggest oil importer, is particularly sensitive to oil prices as it has to import all of its crude oil needs.
Gains in Taiwan technology shares such as AU Optronics Corp refreshed investors appetite for local techs.
Samsung Electronics Co Ltd, the world's top maker of memory chips, closed up 1.23 percent at 495,000 won.
LG Electronics Inc, South Korea's top home appliances maker, rose 1.29 percent to end at 70,600 won.
Shares in POSCO Co Ltd, the world's fifth-biggest steel maker, ended up 1.91 percent at 186,500 won, while state-run electricity provider Korea Electric Power Corp rose 2.58 percent to 27,800 won.
Shinhan Financial Group, South Korea's No 2 financial services provider, rose 2.59 percent to close at 25,750 won, boosted by hopes it would report solid quarterly earnings on Wednesday.
However, gains were capped due to concerns about the impact of a stronger won currency, which traded within sight of seven-year highs posted on Friday.
Investors are concerned a firm won will dampen the price competitiveness of local exports, which have been the sole driver of economic growth during an extended slump in domestic demand.
Currency markets have been awash with speculation about whether China would revalue its pegged yuan currency after the G7 meeting in London February 4-5.
If China relaxes its yuan peg, a broad rise in the currencies of China's Asian trading partners, including South Korea, is expected to follow.
Shares in top local chemicals maker LG Chem Ltd rose 1.57 percent to 38,750 won after it reported a jump in quarterly profit.
The over-the-counter Kosdaq rose 0.94 percent to finish at 472.95, its highest close since ending at 478.70 on April 28 last year.
Trade volume reached 466 million shares worth 2.2 trillion won ($2.15 billion) compared to 392.1 million shares worth 2 trillion won on Friday. Gainers edged out losers by 503 to 236 with 74 titles ending flat.
Foreign investors sold a net of 47.11 billion won in shares on the main bourse, while retail investors sold a net of 120.21 billion won. Institutional investors bought a net of 173.43 billion won.
The March KOSPI 200 futures index rose 1.35 points to 121.20 and the underlying KOSPI 200 spot index rose 1.41 points to 121.06.