This article by Roger Dodson of The Independent outlines many studies showing that touch lowers blood pressure and stress hormones while promoting healing.
In the most recent study by neuroscientist Jim Coan of the Affective Neuroscience Laboratory of the University of Virginia, brain scans of women showed less stress when they were touched.
"As soon as the women touched the hands of their husbands, there was an instant drop in activity in the areas of the brains involved in fear, danger, and threat. The women, who had been exposed to experimental pain while they were scanned, were calmer and less stressed, and a similar, but smaller, effect was triggered by the touch of strangers.
The story only mentions oxytocin in passing at the end, but clearly, it's the release of oxytocin in response to touch that provides these benefits. Dodson writes,
Some believe the power of touch is all down to the placebo effect. "If you touch your partner they feel relaxed, but if someone else touches they may not feel as relaxed," said Professor Edzard Ernst, a professor of complementary medicine at the University of Exeter. "That is very much mind over matter. It has nothing to with the sensations of being touched, it is the expectation and the context of the intervention, rather than the specific effect of that intervention."
I think Dr. Ernst is wrong about the placebo effect. If you touch your partner and he or she feels relaxed, it's a combination of the physical sensation of being touched and the context of being touched by someone you trust.
The oxytocin response isn't automatic. The brain of someone who grew up in an extended, loving family may release oxytocin easily at almost any friendly touch. At the other extreme, people whose early nurturing included anxiety, anger or abuse may not be able to release oxytocin in response to touch at all. Most people's brains release oxytocin in response to touch in situations where they feel safe, with people they trust. Such as their mates.
This is why married people tend to live longer and be healthier; they have ongoing, safe touch relationships that promote the regular release of healing, calming oxytocin.