Scientists from the University of Vienna found that the hormone oxytocin releases into the blood stream when you hold a friend close.
However, you have to be selective over who you hug. Giving a polite embrace to someone you don't know well can have the opposite effect, according to the research, the 'Daily Mail' reported.
Oxytocin, a hormone produced by the pituitary gland, is primarily known for increasing bonding, social behaviour and closeness between parents, children and couples.
Increased oxytocin levels have been found, for example, in partners in functional relationships. In women, it is also produced during the childbirth process and during breastfeeding in order to increase the mother's bond with the baby.
Hugging can also soften your personality. The researchers said someone who hugs loved ones often becomes more empathetic over time.
"The positive effect only occurs, however, if the people trust each other, if the associated feelings are present mutually and if the corresponding signals are sent out," neurophysiologist Jurgen Sandkuhler, said.
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"If people do not know each other, or if the hug is not desired by both parties, its effects are lost," Sandkuhler said.
When we receive unwanted hugs from strangers or even people we know, the hormone is not released and anxiety levels rise, the study found.
"This can lead to pure stress because our normal distance-keeping behaviour is disregarded. In these situations, we secrete the stress hormone cortisol," Sandkuhler said.