Islam takes into account the natural human feelings, and, hence, there is nothing wrong with a man’s expressing his tender parental love to his daughter, by kissing or hugging her, so long as this is done in the normal framework of a parent-child relationship, with no room for perverted feelings. If there is the least sexual feeling in this relation, then no physical contact is permitted.
However, a Muslim should also consider the community he or she lives in and should not behave in a way that may raise doubts or suspicious thoughts about him or her. If a person happens to be in a suspicious situation, he or she should clarify the reality of the situation to dispel people’s doubts. When some of the Companions of the Prophet (peace and blessings be upon him) saw him walking with a woman, who was actually his wife Safiyyah, at night, they hastened their pace; but he summoned them and said, “Wait this is Safiyyah.” When they expressed their wonder, he pointed out to them that Satan might have cast evil thoughts on their minds and this is why he clarified the matter for them.