For business I'd pretty much always go handshake, maybe handshake with a pat on the arm or shoulder if it's less formal. The hug in this context was a bit bizarre.
On the other hand, nothing wrong with hugging a friend who's close to you, male or female. I don't hug male friends often but I see nothing wrong with it. Usually side-hug rather than front on, though.
I think the people who get all squeamish about hugging another man are usually the ones most likely to be repressing the fact they're gay, ha...
I'm confident that vaginas are my thing so it doesn't make me feel awkward. As long as you don't have a raging hard on there's absolutely nothing "gay" with giving a mate a casual hug/back pat, especially if they're depressed about something or feeling a bit s**t.
I think in appropriate context, hugs can communicate a friendly camaraderie that just chatting or shaking hands can't.
In a romantic context, they're also an excellent way to build early physical rapport with a woman and show confidence. But those hugs feel very different to the quick friend-hugs you'd share with a bro.