South Korean stocks closed 0.4 percent higher on Monday as investors' concerns over the Greek debt issue weakened, analysts said. The South Korean won gained against the U.S. dollar.

The benchmark Korea Composite Stock Price Index added 8.20 points to 2,055.16. Trading volume was low at 260.5 million shares worth 4.24 trillion won ($3.86 billion), with gainers outpacing losers 471 to 338.

Analysts said Seoul shares gained ground as investors are increasingly paying keen attention to the prolonged Greek debt issue, with the EU heads set to hold a meeting to discuss on the fate of the troubled country whose debt payment is due at the end of this month.

"It is unlikely that the Greek uncertainties will expand further," said Lee Kyung-min, an analyst at Daishin Securities Co.

"Although it is too early to say how it will conclude, it is believed that the shock will be limited."

Foreigners offloaded a net 116.9 billion won, while retail investors scooped up a net 104.8 billion won. Institutions bought more shares than they sold at 18.9 billion won.

Tech shares traded higher, with Samsung Electronics climbing 1.18 percent to 1,281,000 won and chipmaker SK hynix adding 0.69 percent to 43,850 won. No. 2 tech giant LG Electronics added 1.78 percent to 51,600 won.

Builders also gained ground, with Hyundai Engineering & Construction rising 9.78 percent to 64,000 won and Daewoo Engineering & Construction rising 1.71 percent to 6,560 won. Daelim Industrial added 1.57 percent to 77,600 won.

Carmakers closed higher, with Hyundai Motor adding 1.54 percent to 132,000 won while auto parts maker Hyundai Mobis rose 0.24 percent to 205,500 won. No.2 player Kia Motors advanced 0.22 percent to 45,800 won.

Mobile carriers traded mixed, with SK Telecom falling 1.97 percent to 249,000 won and KT remaining unchanged at 28,500 won. LG Uplus climbed 0.11 percent to 9,110 won.

The local currency ended at 1,098.80 won against the greenback, up 8.30 won from the previous trading session.

Bond prices, which move inversely to yields, ended lower. The yield on three-year Treasurys added 1.7 basis points to 1.787 percent, and the return on the benchmark five-year government bonds moved up 4.5 basis points to 2.059 percent. (Yonhap)