Rafael Nadal insisted he can still win the ATP Finals for the first time despite a damaging 7-6 (9/7), 7-6 (7/4) defeat against Austria's Dominic Thiem on Tuesday.

Thiem overpowered Nadal behind closed doors at London's O2 Arena to put a dent in the Spanish star's bid to finally lift the one major prize missing from his packed trophy cabinet.

Thiem became the first player to qualify for the semi-finals a few hours later when reigning champion Stefanos Tsitsipas beat Russian seventh seed Andrey Rublev 6-1, 4-6, 7-6 (8/6).

Nadal, who lost the 2010 and 2013 finals of the event, has to beat Tsitsipas in his last group match to reach the semi-finals of the prestigious season-ending tournament.

Despite his perilous position, Nadal goes into the showdown against Tsitsipas, with the winner guaranteed to progress to the last four, in confident mood after battling hard against the inspired Thiem.

"He played I think an amazing match, and I played well too. So my feeling is not negative. I lost, but I had plenty of chances," said Nadal.

"I'm happy with the way I played. I think my chances are bigger to have a very good result now than five days ago because the level of tennis, even if I lost today, for me is much higher."