The British plan for the second day of Battleaxe was for the 4th Indian Division to support the 7th RTR at Fort Capuzzo, and to continue attacking Halfaya Pass. If that was successful, then they would move towards Bardia. The 7th Armoured Division would continue fighting in the Hafid area and protect the flank from attack.
On the first day, the 5th Light Division (with 96 running tanks) had been moved forward to Gambut. A combined tank, reconnaissance, and artillery force was sent to reinforce the 15th Panzer Division. Rommel decided to send the 8th Panzer Regiment against the British near Fort Capuzzo and the 5th Panzer Regiment across the desert to hit the British flank and rear, with the hopes of rattling them. The assignment of the 7th Armoured Division was to defeat any such flanking moves.
This is based on the account in Vol.II of the Official History.