All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger.
First of all, we thank you for visiting our site and for respecting that man because he is a Muslim, and also for being keen on not committing a homosexual act with him.
You should know that Islam is a religion which is keen on preserving the morals from anything that may affect it, among which is that Islam urges to keep company with righteous and pious people who guide and help people to do good and warns them against anything that may spoil the morals, among which is keeping company with someone who may negatively affect a Muslim, and this is really the good that Islam wanted for that man.
However, if he did not commit homosexuality with you, he may commit it in the future. The fact that he hugged you, as you mentioned in the question, is a step that may lead him to other steps.
Concerning you, we advise you to embrace Islam because it is the true religion that achieves happiness for a person in this life and in the Hereafter.
For more benefit on Islam and the evidence that it is the true religion, please refer to Fataawa 88906, 852340and 81979.
Furthermore, we advise you to repent to Allaah from this act and avoid it. It is enough of a hindrance for you from committing it to remember the health harms that may affect you because of it, like AIDS, and other social disadvantages, the best evidence about this is that your friends say that you are homosexual.
What is worse is that this act brings the wrath of Allaah, as He destroyed a nation who practised this act who were the people of Loot (Lot).
For more benefit, please refer to Fataawa 88137 and 89290.
Allaah Knows best.