i was holding a resistance wire(insulated) coiled up and both of its ends were connected to a Ohm-meter it was showing 18 ohms while the circuit was on i pulled the coil from both ends and made that a straight wire with barely a knot in between and observed that the reading of Ohm meter dropped to 16.5 Ohms. Is there any relationship between resistance and magnetic field? or was it just because the ohm-meter is having errors?
There are a few possibilities here, Wikipedia shows many types of ohmmeters but I am going to consider only two; 1. Constant voltage and current measurer, 2. Constant current and voltage measurer.
In your case as you stretch the wire two things happen :
1. Resistance increases as length is slightly increased and cross sectional area reduced.
2. Self-Inductance is highly reduced, thus reducing back emf.
For the 1st type of ohmmeter both parts result in showing decrease in resistance. As the resistance of circuit increases and opposition potential drops the current through the circuit increases, thus increase in measured current shows decrease in resistance as the device assumes a fixed potential.
For the 2nd type of ohmmeter, the increase of resistance increases the current in voltmeter arm, while reduced self-inductance decreases the current in voltmeter arm. As the reading of voltmeter depends directly on current through it and you observe reduction in resistance I would say that reduction in self-inductance decreases the current much more than that increased due to change in resistance.
Of course, as you see that your stretching of the wire to make it straight does in fact increase it's resistance, both the ohmmeters have faults ! A more accurate way to measure resistance would be to use a meter bridge or potentiometer.
On looking up, I found that ohmmeters have a current source which drives a constant current into the wire and another independent circuit which measures the voltage across the wire. Then, Ohm's law is used to get the resistance of the wire. If that were the case, then a coiled wire will produce an induced electric field if the current was varying, and the resultant current through the wire would have reduced. So, the measured voltage will be less and hence the resistance being shown. But, in your case it's the other way round and hence, I doubt if it has to do anything with electromagnetic effects.
Since the Ohmmeter is measuring at DC, there are no inductance effects present. The change in resistance is likely due to a change in stresses in the wire. This wikipedia article on the piezoresistivity describes the effect.