What physical contact, if any, is acceptable between a supervisor and a student?
In general, I refrain from initiating any physical contact other than handshakes or "congratulatory" gestures such as high-fives or fist bumps. This allows the student to control the level of interaction if they so choose.

My suspicion about what would be considered "acceptable" is that it varies widely from country to country, depending on what is considered an "acceptable" level of contact between strangers or professional colleagues. For instance, in Muslim-dominated countries, the "side-hug" mentioned in the answer—or even shaking of hands—between a male boss and a female subordinate, or vice versa, would likely be frowned upon! Similarly, in other countries, I could see how a "side-hug" could be within the realm of acceptable contacts (although still on the somewhat "iffy" side).