The world number one was beaten 3-6, 6-4, 6-4 by Germany's Tommy Haas at the invitational Kooyong Classic.
Martina Hingis was nearly caught napping on a gloomy day before she woke up in the nick of time to reach the second round.
The unseeded Russian beat Marcos Baghdatis to reach the quarter-finals of a Grand Slam for the first time at the French Open.
The Argentine concluded an ideal warm-up for the French Open with a 7-6, 6-0 win over the Frenchman in the Poertschach International final.
Roger Federer slumped to a 6-2, 6-4 defeat against Italian wild card Filippo Volandri in the last 16.
The big-serving Aussie beat Sebastien Grosjean in the first men's semi-final at Wimbledon.
The Briton escaped with a $2,500 fine following his foul-mouthed tirade at an umpire during his second round defeat by American Andy Roddick.
Sebastien Grosjean withdrew from the quarter-final tie against Russia later this month citing fatigue.
It was fitting that Nikolay Davydenko should get his biggest win of the year on Sunday at a Shanghai Masters tournament dominated by injury retirements and a debate over the length of the season.
The 10th seed reached his first grand slam final in which he will play world number one Roger Federer on Sunday.
The Swiss holds the rare distinction of not attracting any negative press despite being a top sportsman.
The Russian blasted tournament referee Wayne McKewen for making him play on what he considered was a wet surface following a rain interruption, against Andy Roddick.
Marat Safin survived another tense match to beat Israel's Dudi Sela 6-3, 5-7, 4-6, 7-6, 6-0 in the second round.
Ivo Karlovic has a winning serve but his lack of movement on court proves his undoing.
The world number one believes he is pulling away from his rivals in men's tennis.
He said that experience had taught him how to handle "an incredibly good baseliner" like Nalbandian.
They head the line-up for the select eight-man field at the Jan. 10-13 event.
World No 1 Roger Federer book his place in the semi-finals of the Madrid Masters with a clinical win over unseeded American Robby Ginepri.
The two players were named as the top seeds for the men's and women's singles event at the Australian Open which starts on Monday.
Fifth seed Gonzalez next faces Andy Roddick atthe Vienna Open.
Sebastian Korda is just the third American to reach the quarter-finals at the Australian Open.
Australia's Lleyton Hewitt dispatched Argentine Gaston Gaudio 6-2, 6-1 to clinch his place in the Masters Cup semi-finals.
The World number was pitted against Spaniard Albert Costa in Wednesday's draw.
The Thai was pushed to a first-set tiebreaker before cruising past the Frenchman in the second round of the RCA Championships.
Rafael Nadal extended his winning streak on clay to 51 matches by cruising past Chile's Fernando Gonzalez at the Rome Masters.
The 19-year-old will equal Guillermo Vilas's 1977 record of 53 consecutive wins on clay if he retains the Rome Masters title this week.
Wimbledon champion Roger Federer took just 46 minutes to beat Tomas Behrend 6-1, 6-1 in the first round of the Swiss Open on Tuesday.
Hingis said Federer now had to make sure he stayed focused on his training and is prepared to "say no".
Roger Federer will require a superhuman effort to hold on to his crown as he faces a devilishly difficult draw.
Andy Roddick ran out of firepower and was dumped by David Ferrer at the Nasdaq-100 Open.
The two will clash for the third time this year at the Indian Wells semi-final
The defending champion was beaten by wildcard compatriot Alex Correjta in 69 minutes in the Monte Carlo Masters.
Lleyton Hewitt breezed into the last four of the Tennis Channel Open with a 6-2, 6-0 win over Philip Kohlschrieber
The world number one admitted he is concerned about finding out something about his first round opponent, Uzbek Denis Istomin.
