In an earlier match of the Gold Group, world number three Novak Djokovic lost to No. 8 Richard Gasquet of France 6-4, 6-2 for the second straight loss, which, combining the Ferrer win, means the Serb has been eliminated from the knockout stage.

"I never expect to beat the number three and two on the road, you know, it is my first Masters Cup, I just play for each match, each point," said Ferrer, who beat Djokovic in straight sets in the first round.

"Everybody felt tired at the end of the season. As for me, I just stay confident and also I don't have pressure, I have nothing to lose for it."

By edging out his compatriot 4-6, 6-4, 6-3 in almost three hours, the 25-year-old Ferrer has one foot in the semi-finals at the year-ending tournament as he notched up his second consecutive win at the round robin phase of the elite tournament.

Nadal, who can still qualify for the semis, outlasted Ferrer inan absorbing first set which saw five breaks of serve in the first six games. Ferrer's netted forehand finally ended the tussle in Nadal's favor after 55 minutes.

But the hard-working Ferrer was in the ascendancy in the remaining match, delivering many unplayable shots, putting all the fans in the Qi Zhong Tennis Stadium to their feet again and again.

"Tonight David (Ferrer) came up with too many crazy shots and play with unbelievable confidence. I can only say that I play well but he play better," said a downcast Nadal.

For debutant Djokovic, his first Masters Cup became a nightmare but he believed it was because of the busy schedule that posed bad impact upon him.

"I was not prepared well for my playing plan. You know, I has played over a hundred matches all together, so many exhausting events, including the Davis Cup," said the 20-year -old, who has played 22 tournaments plus the Davis Cup competitions, which made him the most hardworking player among the world top five.

"I know the cost. The biggest cost is that I'm really exhausted, mentally and physically.

"Hopefully next year I'm gonna sit down with all my team and try to get the best possible schedule so I can have strength for the most important events," Djokovic added.

While the 21-year-old Gasquet, who lost to Nadal in full sets in the first round, had the total game in control, producing an impressive display of baseline hitting from both sides.

A lacklustre Djokovic was always struggling on serve and even punched his racquet to the court in disgust before finishing the one hour and 25 minutes match.

Gasquet, the last player to qualify for the year-ending showpiece, has enjoyed his best season so far, winning his fifth career title in Mumbai in one of three finals appearances.

"He (Gasquet) is very talented and he is playing smart. He is not hitting the ball all the time, so the guy is really patient," said Djokovic.

The two, being very good friends off the court, have played twice before and Djokovic has won both with a score of 6-1 in the third set.

"We grow up basically together. When we shook hands after the match, he just said, 'Rest a little bit, my friend. The matches are a little bit too much'. We had a joke, he is a great guy," added a smiling Djokovic at the press conference.

The Frenchman also stands a chance of reaching the semi-finals, compiling a 1-1 round robin record.

Triple champion Roger Federer, who was handed the year's top player trophy for the fourth consecutive time at a dazzling ceremony on Tuesday, was also shocked on Monday by eighth- ranked Chilean Fernando Gonzalez.

He will be hoping to stay in the defending run, taking on Russian Nikolay Davydenko in Wednesday's Red Group competition. The other tie will see American Andy Roddick against Gonzalez.