Indiana, Indianapolis - The shorthanded Indiana Pacers held off New York 106-104 on Friday to leave the Knicks' bid for an NBA Cup repeat in tatters.

The Knicks won last year's in-season tournament in what proved a curtain-raiser to their run to a first NBA championship since 1973.

But after coming up short in their bid to erase a 14-point third-quarter deficit, the Knicks fell to 0-2 in Cup play.

They are not mathematically eliminated, but in three prior editions of the Cup no team with two group stage defeats has reached the knockout rounds.

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Pascal Siakam scored 19 points to lead a balanced Pacers attack. Aaron Nesmith scored 18 points, Kelly Oubre Jr. added 16, and Ivica Zubac and Andrew Nembhard chipped in 12 apiece to lead Indiana, who were again without injured star Tyrese Haliburton.

Jalen Brunson scored 33 points and handed out 11 assists for the Knicks, who tied it at 87-87 early in the fourth quarter only for the Pacers to pull away again with a 15-2 scoring run.

The Knicks made one last push, cutting the deficit to two, but Karl-Anthony Towns – who scored 23 points and pulled down 15 rebounds – missed a potential game-tying basket with nine-tenths of a second remaining.

"Very proud of our team. We were pretty big underdogs coming into this game," said Pacers coach Rick Carlisle, whose team outscored the Knicks 50-30 in the paint.

"Second half, it got difficult. New York is a championship team. They know how to make comebacks," Carlisle said. "Our guys stuck together and kept fighting together."

The Knicks are last in East Group B and will host the Cleveland Cavaliers and Miami Heat in their last two Cup group games.