Following the third-round win, the 18-year-old Indian now leads the men's section with 5.5 points in all, half a point clear of USA's Fabiano Caruana who scored his first victory in classical against reigning world champion Ding Liren of China.
"I wish Magnus would take similar risks against us old folks," said Nakamura on Carlsen's choice of playing a risky battle against Praggnanandhaa.
Classical chess, also known as slow chess, allows players significant amount of time to make their moves, usually at least one hour. Carlsen and Praggnanandhaa had drawn their previous three encounters in this format
In the women's event, Praggnanandhaa's elder sister R Vaishali maintained her sole lead after getting past Anna Muzychuk of Norway in the Armageddon game after drawing the Classical.
Vaishali inched up to 5.5 points too and enjoys a full-point lead over women's world champion Wenjun Ju of China who is sole second by a half point margin over compatriot Tingjie Lei.
Muzychuk, Pia Cramling of Sweden and Koneru Humpy share the fourth spot here on three points each.
It was a Sicilian Kann, an opening that does not find many favours in the elite chess circles, wherein Praggnanandhaa got an advantage through better space control right from the beginning.
The middle game saw Magnus' king stuck in the centre and the Indian super-talent capitalised with some deft manoeuvres after the minor pieces were off the board.
Eventually, the King's vulnerability came to question as Praggnanandhaa posed some dangerous checkmate threats. The game lasted just 37 moves.
Caruana outclassed Liren out of an Italian opening game.
Launching the offensive on the king side the American, who had lost the first two rounds under Armageddon, he sacrificed two minor pieces for a rook to rip apart black's King side and another exchange sacrifice soon sealed the game in his favour.
In the other game of the day, Nakamura proved superior as white against Alireza in the USD 1,60,000 prize money event.
In the women's section, Vaishali ensured that her lead remained intact after a draw in Armageddon as black against Muzychuk.
Seven rounds still remain in both sections of the event.
Results
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Men: R Praggnanandhaa (Ind, 5.5) beat Magnus Carlsen (Nor, 3) 3-0; Fabiano Caruana (Usa, 5) beat Ding Liren (Chn, 2.5) 3-0; Hikaru Nakamura (Usa, 2.5) beat Firouzja Alireza (Fra, 2.5) 1.5-1.
Women: Anna Muzychuk (Ukr, 3) lost to R Vaishali (Ind, 5.5) 1-1.5; Koneru Humpy (Ind, 3) beat Tinglie Lei (Chn, 4) 1-1.5; Pia Cramling (Swe, 3) lost to Wenjun Ju (Chn, 1-1.5.
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